ocus of the day:"• We present our T

ocus of the day:

"• We present our Top macro trades for 2015...

• Theme 1: The Fed will lift off in 2015 – UST curve flatteners and short gold.

• Theme 2: Policy divergence = Persistent US dollar strength – short EUR/USD; long US small caps (Russell 2000) vs. large caps (S&P 500) and short S&P 500 vs. nonUS DM equities.

• Theme 3: Lower oil prices: the negative implications are priced in, the positive ones less so – long consumer discretionary stocks and Korean stocks.

• Theme 4: The Bank of Japan’s surprise – long Japanese equities (large caps), currency hedged, and 10y inflation swaps.

• Theme 5: Europe is priced for the Japan scenario, but the ECB can change that – long peripheral equities vs. bonds (volatility adjusted); Receive EUR 5/10/30s butterfly; short EUR FX.

• Theme 6: Broad negativity on global growth/China could be a good opportunity in 2015 – long EM equities that benefit from US growth, low oil prices and China easing (Korea, China and India); long global cyclical vs. defensives stocks.

• Theme 7: Four headwinds for EM in 2015, but a few opportunities as well – long Indonesia, India and Mexico local bonds and long USD vs. CZK, HUF and PLN.

• Theme 8: A good environment for EUR-funded FX carry – short EUR/IDR, short EUR/INR and short EUR/BRL.

• Theme 9: Long India assets: the big story in EM – long equities, bonds and INR (vs. EUR).

• Theme 10: What are the big consensus risks for 2015? – long short-dated US rates vol; long basket of INR, BRL and TRY vs. USD; long European equities vs. US equities; long EM equities vs. US equities; pay 10y JPY via option."

Guillermo Felices, Jim McCormick, & Krishna Goradia - Barclays Capital