Pimco - Cyclical Outlook: Inflation, Growth and Politics Will Guide Central Banks' Hans in Europe in 2016

Key Points:
- Our baseline for the eurozone is for a continuation of above-trend GDP growth this year, albeit at a tepid pace of about 1.5%, similar to 2015.

- We expect above-trend growth and a further contraction in the output gap will leave the Bank of England (BOE) in a position to raise official interest rates in 2016.

- Portfolios should be biased towards structural positions that provide positive carry over the course of the year. We prefer an underweight in shorter and longer maturities of the interest rate spectrum, as well as an overweight in large peripheral countries.