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Koefed: My essential macro trades for Q1
With the US economy at its strongest level since 2009, the US consumer is poised for a comeback in 2015 according to Mads Koefed, Saxo Bank’s Head of Macro Stagey. Growth in the world’s largest economy has been aided by a strengthening labour market that was seen throughout 2014.
The labour market in Europe however is a very different story with deflation stalking the Eurozone. While the US is preparing to end its quantitative easing progamme, it's expected that the European Central Bank will begin QE in the first half of 2015 in an attempt to stimulate growth.
Looking for value in this market, Mads is looking at going long on European high yield corporate bonds. He highlights the IHYG as a way to gain exposure to the market, given its 5 percent annual dividend and probable price appreciation following the ECB’s QE programme. Additionally, believing in a comeback for the US consumer, Mads is interested in investing in the Sider Consumer Staples ETF, XLP. He notes that it has a fair PE ratio of 22 and the benefit of a 2.5 percent dividend rate.
02:49 minutes
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