Economics & Strategy – Local-Markets Strategy: Third

Debuting at No. 3 is Bank of America Merrill Lynch. The five-strong squad is co-directed by David Beker, who works out of São Paulo, and New York–based Claudio Irigoyen. “They are savvy and realistic,” affirms one backer. Regional issues the strategists are monitoring include structural reforms in Mexico that are expected to be approved this year, as well as the evolution of fiscal and monetary policy in Brazil on the back of a much-deteriorated growth-inflation trade-off. At the same time, the U.S. Federal Reserve’s intention to taper its quantitative easing measures and slowing growth in China are important global concerns. “We are currently recommending to reduce duration, concentrating on receiving rates in the very short end of the interest rates term structure, as in many cases the built-in risk premium is excessive relative to our monetary policy views,” Irigoyen observes. “We are also recommending to avoid any direct exposure to the dollar as volatility is expected to remain high.” Beker also co-leads teams that claim third place in Economics and a runner-up position for coverage of Brazil (with Marcos Buscaglia and Felipe Hirai, respectively), while Irigoyen also co-captains (with Jane Brauer) the crew at No. 1 in Sovereign Debt. — Carolyn Koo