The J.P. Morgan View: A summer range beckons. [Domestic Growth might fall from 3.3 in Q2 to 2% 11H1 $SPX

Economics: Growth momentum should soften as support from fiscal policy and inventories wanes. DM growth to fall from 3.3% in Q2 to 2% in 11H1. Asset allocation: Falling growth momentum and unresolved EU long-term funding to keep risky markets in a range during the summer. Fixed Income: Stay positioned for higher yields, but only in the front end of the US and Australia, where the risk of further declines appears limited. Equities: Reverse underweight on global banks. Global regulators likely to soften or postpone onerous liquidity requirements under Basle III. Credit: US HG spread year-end forecast revised up to 150bp from 125bp. FX: JPY and EUR in longer-term range vs USD. Be long CAD and INR vs USD, and CHF vs EUR. Commodities: Oil forecast lowered to $85 for year end but fundamentals remain positive. Stay long.