GLOBAL EQUITY STRATEGY: Dispersion within cyclicals has risen to levels which on the last two occasions marked a turning point in their performance relative to defensives (2002 and 2008). While we remain benchmark European cyclicals, we are overweight domestic European cyclicals. The European domestic cycle still looks more robust relative to consensus than that of the US/China (with domestic demand lagging the US by 11% since 2011) and we believe that the euro will not weaken. At the same time we are underweight expensive defensives and take mining to underweight from benchmark.
Full Note attached