And BA/ML analysts noted "global...>

US TSYS/RESEARCH: And BA/ML analysts noted "global growth over the last few

years has been dominated by isolated bright spots and idiosyncratic problem

stories. The US has led the way within the G5, Europe/Japan have been noticeable

laggards and UK/Canada have been dealing with domestic shocks (Brexit and oil

prices). Similarly in EM, better growth in India and sideways growth in China

has been met with increased political risk in Brazil and risk from commodities

to Russia."

- "This multi-speed global economy has helped fuel two major investment

philosophies," they said. "On the macro front, it exaggerated central bank

policy differentials: making FX and front-end rate differentials the easiest

expression of macro views."

- And they add that "on the flow side, crossover demand from foreign private

investors given interest rate differentials became the single largest theme

driving both Treasury yields and spread product such as corporates. Nearly every

story on flow, since the end of Fed QE, has focused on Japanese and European

demand for US fixed income assets."