Citi: 80 Percent Chance of Taper by January

Valuable insights into global markets can be obtained from Citi’s recent global asset allocation report issued last week.

Asset allocation: Key focus

Asset prices did well following the ‘no-taper,’ but Citi continues to prefer equity to fixed income. The rally in U.S. treasuries will probably fizzle once tapering begins in earnest. According to Citi economists, cumulative probabilities for tapering starting October is 15%, December 50% and in January 80%.

Equities, however, are not all painted with the same brush – emerging markets remain risky, while Japanese stocks are highly volatile....