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Feb 18
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$59.38
$59.38
+0.0%
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LONG
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Derek Halpenny
Head of Research, MUFG Bank
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MUFG expects the Fed to deliver three rate cuts and views the labor market as "mixed at best." Halpenny argues Trump will not raise tariffs further because he needs to deliver on cost-of-living promises. The market has priced in a "Trump Trade" (stronger USD due to tariffs/inflation). If Trump refrains from tariffs and the Fed cuts rates to support a softening labor market, the interest rate differential supporting the USD collapses. Short USD (Long JPY). Halpenny explicitly predicts a "notable drop" in USD/JPY later in the year and a 5% drop in the Dollar Index by 2026. Inflation re-accelerates, forcing the Fed to hold or hike; Trump aggressively implements universal tariffs. |
Bloomberg Markets
China Doesn't Want Russia to Lose Ukraine War...
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Feb 16
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$60.19
$59.38
-1.3%
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NEUTRAL/WATCH
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Mark Cranfield
Cross Asset Strategist, Bloomberg
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Japan's GDP missed expectations massively (0.2% vs 1.6%), yet the Yen has rallied from 159 to 153 against the Dollar. The weak economy makes it harder for the BOJ to hike rates aggressively (bad for banks), but structural factors (fiscal discipline, inflation entrenchment) are preventing the Yen from collapsing. The currency is stabilizing despite the weak data. NEUTRAL. The "easy short" on the Yen is over, but the "long" trade is complicated by a stalling economy. The Fed cutting rates faster than expected would send the Yen ripping higher regardless of Japanese data. |
Bloomberg Markets
Laopu Gold, CATL Added to Hang Seng Index | T...
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