If the market wasn't already scratching it's head over what is President Trump's core policy beliefs, it should start to at this stage because there hasn't been a clear line of thought or direction and he hasn't demonstrated the ability at this stage to push through any major policy.
More evidence came o/n in his interview with the WSJ.
About the only thing that he has stayed steadfast in is his immigration stance and his jawboning of the USD, with his argument for the latter based on the fact that it reduces the competitiveness of US companies.
Well, he repeated USD jawboning o/n and this along with his preference for low interest rates saw the USD slump and USTs rally hard yet again.
We have long stressed our doubts over Trump policy and in particular how the market was pricing to perfection what we saw as clear unknowns, and we continue to expect more unwinding of parts of the Trump trade ahead.
Specifically lower UST yields and USD.
While it will also weigh slightly on market sentiment alongside the current geopolitical jitters, once the latter risk abates, we would expect a continuation of the carry trade and rotation into EM Asian assets. JH
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