DXY firmed last night:
AUD flamed out:
Support from JPY:
Oil and gold yawn:
Copper wants up:
Big miner retest of the lows on deck:
EM lives!
Junk meh:
Yields await US CPI tomorrow:
Stocks soft:
Not much to report, but if you are worried about the return of Donald Trump then buy international assets:
…most FX investors seem to assume that the prospect for a Trump victory would embolden the USD-bulls for two reasons: (1) the risk of US tariffs and a re-escalation of the global trade war; and (2) the prospect for improved governance in Washington DC especially if the GOP keep sits majority in the House and regains a majority in the US Senate.
With the upcoming election shaping up to be a “2020 rematch”, we note that the USD TWI rallied by almost 4% in the two months after Trump’s2016 victory but it lost more than 4% in the wake of Trump’s loss to Biden in 2020.
Moreover, given Trump’s threat to swiftly introduce new tariffs if elected, we further note that the introduction of tariffs by the Trump Administration tended to support the USD.
A look at the performance of the individual USD-crosses in the wake ofthe 2016 and 2020 Presidential elections would suggest that the GBP was the best performing and the JPY was the worst performing G10 currency.
We also note that the JPY and AUD were the worst and the CAD the bestperforming G10 currencies in the aftermath of the tariff announcements by the Trump administration in 2018 and 2020.
On steroids this time given the parlous state of China.
