15 Nov 2024
Series II Trump Triumps US Dollar
flight of capital happening, due to reduction in Yields as inversely proportional to price of bonds.
Spikes in Dollar and tariffs, and markets for next 6 months,
Equities can be -5% even from here but will bounce back and stabilise at 77500/80000 Sensex.
USD INR can further fall to 85 levels.
USD JPY Will appreciate JPYbwill appreciate to 135-145 levels from 155 now
Gold will further fall 5-10% and bounce back next year.
Expect a major sanction and action to boost Dollar.
Elon Musk Next President .
Ukraine war to stop but on the condition that Russia will not support and supply weapons to Iran and Iran backed groups and Iran May see further bombings / or major sanctions.
People taking money out from all hyped markets
Only Banking is bought.
World Debt Markets
Due to Convexity and Duration Impact -
per percentage reduction in yield per trillion dollars will be 0.5-0.75 /100 USD denomination of Govt Bonds - US Dollar’s (2-3 years)
impact on prices will be
5B USD per trillion minimum which can double due to trading and inefficiencies
When reduction of 2% is expected over next 2-3 years- 31-50T USD treasuries will benefit almost 200-400 B USD gain and hence flight of capital.
Accordingly all countries holding US Treasuries are trying to benefit on this. This will increase demand and hence.
USD is a double edged sword as if it appreciates and interest rates reduce- people dump local currencies and borrow and hedge (swaps) in USD. When it depreciates , rates increase countries loose on investments and holdings and consequently local currencies too depreciates and their ratings start falling as counterparty exposures and country ratings too fall ! As Banks world over loose on treasuries and have to book MTM and they go slow and hold counterparty and country limits.
With green or red background, the recent ratings/interest rates variations.
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