US: Wild swing in USD dominated by President-elect Trump’s first press conference - Rabobank

Michael Every, Head of FMR at Rabobank, notes that yesterday’s trading was dominated by another wild swing in USD and that wild swing in USD was dominated by President-elect Trump’s first press conference since July.

Key Quotes

“That conference had more than a little of the game-show atmosphere to it given no one knew in advance what topics would or wouldn’t come up, and what double-entendres, or even singleentendres, might be inserted. However, as it turns out, the event left most of us feeling Blankety Blank. There was a little about avoiding conflicts of interest, more about “fake news” and the “crooked media”, a reference to fence-mending with Russia, a repetition that Obamacare will be repealed and replaced “almost simultaneously”, a pledge to start work on the Mexican border wall (not fence), and to press ahead with a Supreme Court nomination.”

“Given that markets have priced aggressively for a reflationary ‘Trump trade’, which we didn’t hear much about, there were necessarily wild swings in the Dollar DXY index, which whipped up from 102 to 102.8, then knifed down to 101.3 before closing the day around 101.7. Likewise, 10-year US Treasuries nudged 2.40%, then slumped to 2.33%, before closing at 2.37%, opening in Asia today at 2.35%. We can, I’m sure, expect many more such whipsaw trading sessions ahead in 2017 as markets try to work out what the Blankety Blank is going on.”