All current evidence points to the Speculation investment zone, according to our models. With Global Liquidity conditions set to further deteriorate over next 6-12 months, paced by Central Bank tightenings and slowing private sector cash flows, we expect 2015 to be a year of Turbulence. Our latest TSS reports published today for DM and EM detail the appropriate investment strategies.

Latest Global Liquidity Update Report and First Quarter Outlook slide pack published today.... What have we seen so far in 2013? Weak Eurozone economic data; more evidence that ECB is cutting back its liquidity injections; announcement that Japan is moving to a 2% inflation target, alongside a record 2012 trade deficit, and decent US and China economic data, plus firmness in commodities and evidence from the breakout in the Dow Transportation Average that investors are moving back to cyclicals. Yield curves are inching upwards, gold is wobbly and the dollar is muscling forwards. To us this data confirms the view from liquidity data: hold your nose and buy cyclicals, especially EM; reduce gold; watch out for another Euro Crisis, and take a bet on structural change in Japan.