Sam Lynton-Brown

Sam Lynton-Brown stated, "we think the dollar will rally further." He argues the market is underappreciating the positive dollar impact through energy and that the U.S. economy should outperform the rest of the world, supported by energy self-sufficiency and haven demand. LONG on Dollar due to expected strength from economic resilience and safe-haven flows amid geopolitical uncertainty. A sudden de-escalation in Iran reducing haven demand, or if the U.S. economy underperforms relative to expectations.

Sam Lynton-Brown pointed to "U.S. long-duration" as an asset class that should be bullish, with a positive backdrop similar to equities. The Fed is expected to hold rates steady, and the market is positioned for downside in equities, making long-duration bonds an attractive defensive play with potential for capital appreciation. Long-duration U.S. bonds should be resilient and benefit from the current market hedges and a patient Fed. If inflation proves more persistent than expected, the Fed could turn hawkish, leading to higher yields and bond price declines.

Sam Lynton-Brown said, "We think that the dollar will rally further," citing the U.S. economy's relative insulation from energy shocks and its haven status. The U.S. is a self-sufficient energy producer, so higher energy costs have less inflationary impact than in Europe, supporting relative economic outperformance and dollar strength. The market is under-appreciating the positive dollar impact from energy and U.S. economic resilience, making further appreciation likely. A rapid de-escalation in Iran and reopening of the Strait of Hormuz could reduce safe-haven flows and pressure the dollar.

Lynton-Brown states, "The Fed will not be cutting rates this year... The US economy is too strong... inflation is contained at above target levels." The market is currently pricing in cuts. If the Fed holds rates steady due to the energy shock while Europe/Asia struggle with higher energy import costs, the interest rate differential and "safe haven" status will drive the USD significantly higher. LONG USD as the cleanest hedge against the geopolitical conflict and sticky inflation. A rapid de-escalation in the Middle East leads to a drop in oil prices and renewed Fed cut bets.