Looking for Signs of a Resumption of the Trump Trade: Continued Adjustment Mood in the Market This Week
Tokyo Market Movement: Dollar-Yen Adjustment and BOJ Rate Hike Expectations
In the Tokyo market at the start of the week, attention was focused on the movement of the USD/JPY pair. Despite strong expectations of a BOJ rate hike in December, Governor Ueda’s economic briefing and press conference failed to provide specific comments that would further fuel the yen’s depreciation. Although there was a reaction towards yen weakness, USD/JPY settled in the mid-154 yen range, showing signs of consolidation.
Adjustment Over the Weekend: Trump Trade Euphoria Takes a Pause
Last weekend, the market saw some adjustment following the dollar-buying momentum and stock market gains driven by the Trump trade. Positive factors such as Trump’s presidential victory and the Republican Party’s control of both houses of Congress were digested, while concerns about the new administration’s hawkish approach to China and escalating geopolitical risks led to some market negativity. Notably, reports that President Biden acknowledged Ukraine’s missile strikes on Russian territory heightened geopolitical risks.
London Market Outlook: Continued Adjustment and Anticipation of Resumption
As the London market opens, it is expected to continue the adjustment mood from the weekend. However, the Trump trade remains a theme that is likely to resume, and traders will be looking for catalysts or signals to restart the trend.
Today’s Key Economic Indicators and Events
There are several economic indicators scheduled for release, but the market’s attention is expected to be relatively low.
- Switzerland: Industrial Production Index (Q3)
- Hong Kong: Employment Data (October)
- Canada: Housing Starts (October), International Securities Transactions (September)
- U.S.: NAHB Housing Market Index (November), U.S. Securities Investment (September)
There will also be speeches from ECB officials, including:
- ECB President Lagarde, Bundesbank President Nagel, ECB Vice President de Guindos, ECB Chief Economist Lane
- Other speakers: Chicago Fed President Goolsbee, Bank of England’s Green
Although the impact of these speeches on the market is expected to be limited, they should be monitored closely.
Future Strategy: Trump Trade and U.S. Dollar & Cryptocurrency Buying
Despite the ongoing adjustment phase, I will continue to keep an eye on the possibility of the Trump trade resuming. The strategy for the coming week is as follows:
- Buy U.S. Dollar: Maintain focus on the bullish dollar trend.
- Buy Cryptocurrencies: Position for a rebound following the adjustment in the crypto market.
I will continue to monitor market movements closely and remain flexible in my approach.
