Deutsche Bank Chief International Economist Torsten Sløk minces no words with his latest chart of the day. "In my view, every asset allocation team in the world should have this chart hanging on their wall," he writes.
The chart shows that a year ago, markets expected both the ECB and the Fed to hike rates at the same time (in early 2016). But now the implied gap has never been wider.
"The investment implication is clear: Expect that the benefits we have seen of QE in the US over the past 3 to 5 years will be playing out in Europe over the coming 3 to 5 years," says Sløk.
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Of course, given the rate of back-pedaling by Fed officials and the ECB Taper topic already being discussed, the rapidity of this "every nation is an island" view of the world may quickly come tumbling down when European decoupling proves not to be...