After The Trump USD Rally, What's Next?
מעודכן
Afternoon guys..
2016 was a roller coast for markets. A year ago investors were in panic about deflation, indeed as the year progressed a good case inflation scenario unfolded. The market reaction following the US elections was even faster that expected.
In real terms the USD is ~8% above its 20y average but still 8% below its high in 2002. Hedge funds are long the USD, real money remains short which is a relatively similar positioning in the last 12 months. Rate momentum has been especially negative for EUR. Meanwhile USD remains an asset with strong equities and the steepest rates trend, capturing the most hawkish monetary policy in G10.
I remain bullish on the USD for the years ahead, there are short term risks such as the BoJ's credibility in easing monetary policy vs. the ECB. Alongside the contributions fiscal policy will play this year as a potential leader over monetary policy.
2016 was a roller coast for markets. A year ago investors were in panic about deflation, indeed as the year progressed a good case inflation scenario unfolded. The market reaction following the US elections was even faster that expected.
In real terms the USD is ~8% above its 20y average but still 8% below its high in 2002. Hedge funds are long the USD, real money remains short which is a relatively similar positioning in the last 12 months. Rate momentum has been especially negative for EUR. Meanwhile USD remains an asset with strong equities and the steepest rates trend, capturing the most hawkish monetary policy in G10.
I remain bullish on the USD for the years ahead, there are short term risks such as the BoJ's credibility in easing monetary policy vs. the ECB. Alongside the contributions fiscal policy will play this year as a potential leader over monetary policy.
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