There are three factors we must focus on going forward. These three drivers (all of which are interconnected) will drive capital flows, price movements, and investor behavior throughout the rest of the year.
These are:
- China’s managed slowdown
- Inflation/disinflation
- Core to periphery flows
In this month’s MIR we review each one and discuss how one leads to the other which leads to the other which leads back to the first; creating a Soros style Benign Circle. We then talk about how these changing dynamics will impact markets; driving some assets higher and many much lower. And then finally we go over what we think will be the most profitable trades in this environment.
