EFTA01176903.pdf

From: US GIG <[email protected]> To: Undisclosed recipients:; Subject: JPM View 05.18.2012 Date: Fri, 18 May 2012 20:49:45 +0000 Attachments: JPM_View_O5.I8.2012-pdf.zip Inline-Images: image003.png J.P.Morgan Global Azs•t Allocation JP Monwrthaso Bank NA J P Morgan Seaton I.M May 18.2012 The J.P. Morgan View O8A on Greek exit risk Jan Loops*" • Asset Allocation - With little policy 'ippon before lime 17 Greek elections. (1•212) 834.5174 there is little supporting antra nil prices Cover maiming longs in risk tart ImaYsQllimmegan cam • Economics — Data am tracking Q2 forecasts. but the recent fall Ul. equities John Normand offsets the impact of lower oil poets The( pushes grouili risk to the 03-20) 7325-5222 downside phn normandeprnorgan corn • Fixed Income— Stay flat duranon and hold EMU hedges Nlkolaos Paniglttcglou (44.20) 7777.01$6 • Equities — Take profit on Dax OW m Europe as nth of Awning bans is mime nikolsoa pangruoglowlynapn Corn • Credit — Wt move underweight credit. and cover our remaining longs to the Seam, Mac Goraln GMOSprxifoho Neardemt we look fa-relative value m CDS vs equity 04.20) 7117-29C6 *wows macgotantiprnorson can • Foreign exchange— We use a 1.22 EURUSD fau vAlue lot Junta. 50 50 odds ofpm vs anti EMI/ results in the time 17 Greek elections Matthew Lehmann • Commodities — This week's start-up of the Seaway pipeline benvers the es 7777-1620 matihes in lehrnanneprtiorgan cam Midwest and Gulf Coast should help °anew the Brent-V.71Spread Lao Evans (44.20) 7742-2537 • Risk markets all lurched down as one gbh week and safe government bonds Monad a wanstomorron corn and the dollar all rose as one, at markets positioned for Lehmankke coots. moans& emanating from Greek election oils Unfortunate's the lime 17 date of these debt= is still a month away. and Eno palmy 'oaken do not want to 17D returns through lily 17 give the shop away even before the elections. for few of strengthenury the 5, sown »nig,/ isar hands of those who are calling for a hard renegotiation with the Troika. That means link upside news over the month and nurkets being driven by pose U6 MO Yokl honing on different post election scenarios with this outlook, and equines BISCap. DM flat on the all.iniportuu 6.month lookback we need to neutralise remain- 30503 ing equity and credo longs B03 USHOGale • Economic news remains broadly neutral and are tracking our Q2 telecoms Q I GDP for both Japan and the Euxo area came in better than expected at 0% and TOW 4.1%. respectively. Forward looking indicators. including the last set of PMls. Wet ACYkelf and recent falls m global equity prices. give us no reason to raise the rest of WO or the year. but with high Q 1. the 2012 projections automatically move up Over at Winne the post month both oil and global equities are down about 10% Funher Greek turmoil v. ould goal down again. The equity fall however. has a higher SOX impact on ec000mm activity than the same %fall mod prices. Hence. we must us Fuld sari now accept a Detainse ink bias on the eccoonnt outlook Goof Ga. &nth' Eutp Ccel lwarn, • Gwenthe almost exclusive focus of global markers on the evolving Greek Cs drama. we provide below a concise Q&A onGreek EMU exit ink The box on p 2 lists a number ofrecent reporh from ffiblorgan analysts on this topic USDA IRSOEttwe • Why do we care? Greek elections are having =may times the =pact that the 030TR recent slowing m Chinese growth ishaving, despite Chines economy being 30 4 5 • omen larger than the Greek one. The higher impact oflocal shocks depends on s....ow...,Imaies rinse %ma bow they affect theworld's two main -contagion madames' — banks and al, Wan lea Imam, od. Chas has hole negative on either. and thus the impact of as growth Mall. P•13•1511a4.alM•a mires The certifying analyst is indicated by an u . See page 7 for analyst vernv.morganmarkets.eam certification and important legal and regulatory &miens's. This email is confidential and subject to important disclaimers and conditions including on offers for the purchase or sale of securities, accuracy and completeness of information, viruses, confidentiality, legal privilege, and legal entity disclaimers, available at httplAvvAv.jpmorgan.comtpages/disclosuresiemail. EFTA01176903