Trump Trade approaching the limits
As president-elect Donald Trump is expected to push forward his populist agenda, short-term figures are already showing trades have reached their bullish extremes.
Add BT as a preferred source
WHILE the S&P 500 made a new high last week, the "Trump Trade" appears to be exhausting. The key elements of the trade have been: bullish US dollar, US equities, USD/JPY, Japanese equities and industrial metals.
The other side of the "Trump Trade" has been: bearish Asia ex-Japan currencies, AUD/USD, gold, and Asia ex-Japan/emerging market equities.
The "Trump Trade" is unlikely to "go away", as it appears to be a manifestation of "inflection points" long in the making in global markets. But it could go into "hiatus" heading into the year's end. And that pause is imminent. With that, over the coming weeks, we expect corrections in US and Japanese stocks, coinciding with pullbacks in the US Treasury 10-year yield, the US Dollar Index (DXY), and the USD/JPY.
Copyright SPH Media. All rights reserved.
