I was in Toronto on Monday to speak with BNNBloomberg about the playbook for trading the tariff news on Wednesday. I dove into what’s priced in and how to react to the initial headlines, which are now expected at 4 pm on Wednesday but could leak out sooner.
I argued that we are at maximum fear around what’s coming but that there are positive signs below the surface. Since then, we’ve seen a big bounce in risk assets, so that call at least has gotten off to a good start.
Importantly, I talk about why the US dollar has been struggling despite the usual ‘risk off’ correlations. It’s a new paradigm in the market and it could last.
Finally, I talk about where to hide if Trump doesn’t dial it down on the tariffs and instead takes an aggressive line.
A few notes:
- I
think we’re at ‘peak trade fears’ right now - The
Carney-Trump call was a positive, among other positive indications - Most
market participants are cautiously on the sidelines - Both
the ‘Fed put’ and the ‘Trump put’ might be dead for broader markets, which
is a total reversal from the start of the year - With
that, the US dollar is broadly weakening as there is fear that Trump won’t
help and the Fed can’t help
For more see:
