The market views Trumpnomics as a glass half full at the moment. The rise in global yields and surge in USD has not spilled over to weaker equities. The US stock market has moved to new highs in a broad-based rally notwithstanding potential headwinds from a strong USD and risks to trading relations and immigrant […]
US yields firm back to recent highs as Yellen notes the inflationary risks that may arise from a big infrastructure spend with the economy near full employment. The BoJ illustrate the power of their Yield Curve Control policy in a rising yield environment, sending the USD/JPY higher. Attention may turn more to the Italian constitutional […]
If the recent surge in global yields is durable, and we think it is, there are two themes in currency markets that need to be further unwound. One is the excessive strength in the JPY based largely on a lack of confidence in BoJ policy, the other is the excessive gains in currencies like the […]
The markets are moving well before the rubber hits the road on the Trump presidency. Trump will have perhaps the most power of any President in decades with Republicans controlling both houses of Congress, but it will take months and even years before many of his wide range of loosely formed policies are implemented. It […]
The USD and US yields have surged as Trump raises to the top of his agenda infrastructure spending with an “America First” policy. Trump made no mention of immigration in his victory speech, praised Clinton and called for national unity, lessening fear he might indict Clinton, build a wall on the Mexican border, and incite […]
The increased prospect of a Clinton victory in the USA election is allowing the market to start to look beyond the risk of policy and social upheaval in the USA. The reduced risk of legal action against Clinton over her use of emails (following the latest FBI release) also improves the prospect for stability post-election. […]
The USD is weaker as the US election takes on deeply disturbing characteristics that may have long-lived implications for political stability and leadership. There may be a modest relief rally on a Clinton victory, but fears that her opponents will seek to have her impeached throughout her term in office will keep confidence in check. […]
The hopes of a clean outcome in the dirtiest USA election in recent memory is dampening investor confidence, undermining US assets and the US dollar. It’s not just the possibility of a Trump victory undermining confidence, it is the risk that a narrow Clinton victory is undermined by questions of legitimacy, national division, and a […]
German bund yields have tended to lead global bond yields higher over recent months. UK gilt yields have also risen sharply as a risk premium for a weaker and more volatile GBP is established and the government moves towards an easier fiscal policy, further contributing to higher global yields. Recent economic activity and inflation indicators […]
The CNY is still one of the least volatile currencies in Asia, but it has become more volatile and is the weakest in Asia this year. Since the beginning of the year, The Chinese government has moved to emphasize management of its exchange rate against a basket of other currencies. Their official basket includes significant […]