ITAÚ: 2014 and the fight against deflation

From a global economic perspective, 2014 is likely to be fighting year; recent economic data suggest a fight against disinflation, if not deflation, lies ahead of developed markets (DM), while the emerging economies (EM) are simply in a fight. The boxer Mike Tyson famously once said everyone has a plan till they get punched in the mouth – well, the emerging economies have been punched in the mouth and are groping for a plan. In keeping with the perverse nature of the current environment, the fight‟s outcome may well see equities declared the winner in a technical decision over bonds.

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