Introducing top recommendation Bank of America Merrill Lynch for the coming year - on materials AMarkets.
1. A short sale of 5-year Treasuries in the background the Fed plans to increase the interest rate.
2. Short sale of 10-year Treasuries. The bonds that are protected against inflation (TIPS), with good profitability can offer investors a stable income with low risk.
3. Buying USD / JPY. The purpose of the yield for 10-year Japanese government bonds, established by the Bank of Japan, equal to 0%. In this situation, the dollar is clearly the winner.
4. Sale of bonds of Brazil, Colombia, Mexico with a long expiration date. Recommendation on relevant background of extremely low liquidity and an overabundance of bonds in the region of developing countries.
5. Sell BRL / MXN. Stricter Fed - harm to the Brazilian economy. Real Madrid will fall next year amid Trump policy.But the Mexican peso suffered too heavy sell-off in recent years and is now seriously oversold.
6. Buy a call option for the USD / CNH. The new president needs weak dollar, China needs even more weak yuan.The pair USD / CNH will continue to grow. Markets until lightly consider this point in the prices.
7. Sell EUR / GBP. Antiglobalists activated in the EU against the background of the election results in the United States, further work under BREXIT, the upcoming elections in the Netherlands, France, the referendum in Italy.
8. Sell 30-year Eurobonds, protected against inflation. The December meeting of the big bosses of the ECB risks bring disappointment to investors. And now you can benefit from the recent growth and capitalize on the market.
9. Sell EUR / RUB. The ruble may rise if OPEC agreed to reduce production, and if the anti-Russian sanctions will be eased.
10. Buy a put option for the spot rate NZD / USD. According to BofA estimated spot rate pair gives a clear pattern "head & shoulders". Experts suggest that the rate will fall over the next year.