Japan's Bond Auction Soothes Nerves Amid Election Jitters

Nathaniel Wright

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Summary:

JGBs rallied on strong auction demand, offering brief relief amid election fiscal worries, while the yen strengthened.

Japanese government bonds rallied after a 40-year bond auction attracted its strongest demand since March, offering a moment of calm to a market worried about long-term debt and mounting fiscal pressure ahead of a snap election.

The auction's bid-to-cover ratio, a key indicator of demand, climbed to 2.76 from 2.585 at the previous sale. In response, the 40-year bond yield fell 3.5 basis points to 3.9%, retreating from an all-time high of 4.215% set just over a week ago. Yields on 10-year and 20-year notes also declined.

"The results were strong, providing the bond market with a bit of relief," said Miki Den, a senior rates strategist at SMBC Nikko Securities Inc. "Still, volatility in the super-long sector is likely to persist until after the election is over."

A Market Breather After Political Shock

The successful sale provides some breathing room after Prime Minister Sanae Takaichi's proposal to suspend the sales tax on food for two years triggered a period of exceptional market volatility.

All eyes are now on the Ministry of Finance's upcoming auctions of 10- and 30-year bonds next week. These sales will serve as a crucial test of whether the renewed appetite for sovereign debt can hold up ahead of the February 8 vote.

Despite the recent turbulence, some major institutional investors see value. Meiji Yasuda Life Insurance Co. stated in an interview that Japan's super-long government bonds present attractive investment opportunities, and the firm is now looking for the right entry point. Similarly, Pacific Investment Management Co. is maintaining its conviction in 30-year bonds following the sell-off.

Market analysts noted that JGB futures rose following the auction, suggesting traders were unwinding short hedges established beforehand. This dynamic is expected to help flatten the yield curve as the long end of the bond market outperforms.

Election Risks and Fiscal Concerns Loom

The primary challenge for Prime Minister Takaichi's government and the Bank of Japan is navigating the markets through the election period without a major disruption, according to a Finance Ministry official. The prime minister's decision to call a surprise vote is seen as risky, with several recent polls showing a slight dip in her approval ratings.

Fiscal discipline remains a central concern for investors, as both major political camps are proposing tax cuts. The Centrist Reform Alliance, Japan's largest opposition party, has promised a permanent tax reduction on food. This has intensified fears that government finances will weaken regardless of the election's outcome. Meanwhile, some BOJ policymakers have expressed concern about how the yen's depreciation is affecting price trends.

Yen Strengthens on Intervention Talk

Separately, the Japanese yen strengthened to its highest level since October during U.S. trading on Tuesday. The move was driven by two key factors:

• Intervention Speculation: Comments from Japanese officials, including the finance minister, fueled speculation that the government might intervene to stop the currency's slide.

• Weaker Dollar: The U.S. dollar broadly declined after President Donald Trump indicated he was comfortable with its recent weakness.

These developments followed a fresh warning from Prime Minister Takaichi on Sunday that the government was prepared to take action in response to a weakening yen and surging bond yields, though she did not specify any particular market.

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China–U.S. Trade War

When Donald Trump returned to office with an "America First" agenda, many predicted trouble for China's economy. Instead, Beijing has navigated the geopolitical landscape by strengthening ties with other global partners, culminating in a record trade surplus.

While U.S. policies have strained relationships with traditional allies, China has focused on building new economic bridges. In 2025, this strategy resulted in a $1.2 trillion trade surplus and monthly foreign exchange inflows that hit a record $100 billion. At the same time, the global use of the yuan has steadily expanded.

This pivot is gaining momentum, with leaders like British Prime Minister Keir Starmer visiting Beijing to reinvigorate business ties and explore new opportunities for cooperation.

Figure 1: British Prime Minister Keir Starmer meets with Chinese President Xi Jinping, highlighting a trend of Western leaders seeking stronger economic ties with Beijing.

Forging New Alliances as US Relations Cool

As Washington's trade approach becomes more unpredictable, China is positioning itself as a stable and reliable economic partner. According to Aleksandar Tomic, an economics professor at Boston College, China is emerging as a "steady partner" for many countries looking for certainty.

"I think China has done a good job... to position itself as the reliable and stable trade partner," said Derrick Irwin, co-head of intrinsic emerging markets equity at Allspring Global Investments. "They basically said, look... We can offer predictability and certainty."

Starmer's four-day visit is the first by a British prime minister since 2018. It follows a trip by Canadian Prime Minister Mark Carney, who signed an economic deal to lower trade barriers and build a new strategic relationship with Beijing. Carney described China as "a more predictable and reliable partner."

This trend extends beyond China's direct efforts. Other major economies are also diversifying their trade relationships. India and the European Union recently finalized a trade deal that will slash tariffs, potentially doubling European exports to India by 2032.

Shifting Trade Flows and Economic Resilience

The geopolitical tensions between the world's two largest economies escalated sharply in January 2025 when Trump returned to the White House. Tariffs on Chinese goods were raised to over 100% before a temporary truce was reached.

In response, Beijing focused on boosting exports to non-US markets and supporting its domestic enterprises. While Chinese shipments to the U.S. fell by 20% in 2025, they grew significantly elsewhere:

• Africa: +25.8%

• Latin America: +7.4%

• Southeast Asia: +13.4%

• European Union: +8.4%

"Many countries previously have not been China-friendly are now kind of pivoting to China... because the United States is becoming a lot less predictable," Tomic noted. "The more the U.S. gets difficult to deal with, the more it opens up for China."

Despite trade friction and domestic pressures from a property sector slump and weak consumption, China's economy still met the government's 5% growth target for 2025. To attract foreign investment, Beijing has also launched pilot programs in cities like Shanghai and Beijing to open market access in services like telecommunications, healthcare, and education.

Financial Markets and the Yuan's Growing Influence

China's financial markets have also shown resilience. The Shanghai index climbed 27% over the past year, outperforming U.S. equities, while market turnover hit a record high. In December, the country recorded its largest-ever monthly forex inflows of $100.1 billion, and its official forex reserves reached a 10-year high of $3.36 trillion.

Figure 2: Chinese equities, represented by the MSCI China and Shanghai Composite indices, have significantly outperformed the U.S. S&P 500 over the past year.

Beijing is also capitalizing on the situation to advance the internationalization of the yuan. With Trump's erratic approach to trade making the U.S. dollar less appealing to some investors, global banks are reportedly boosting yuan liquidity in offshore hubs and improving payment settlement frameworks.

"We have seen quite a few cycles of China trying to internationalise yuan and then pulling back," said a banker at a global bank with a presence in China. "This time it's different... Trump policies are very conducive for boosting yuan usage."

The data reflects this shift. More than half of China's cross-border transactions are now settled in yuan, up from almost zero 15 years ago. According to the PBOC and SAFE, nearly half of China's overseas bank lending is now in renminbi.

Figure 3: The Chinese Yuan's performance against the U.S. dollar, showing a notable appreciation in 2025 as its global usage expands.

Skepticism Remains Despite New Trade Deals

However, some foreign policy analysts advise caution. Patricia Kim, a fellow at the Brookings Institution in Washington, argues that distrust of the U.S. does not automatically translate into trust in Beijing for American allies.

"Many of these countries harbour deep concerns about China's approach to trade, its use of economic coercion, and unresolved maritime and historical disputes," Kim said.

She added that while China may currently appear more pragmatic compared to the Trump administration's rhetoric, "Beijing's actual behaviour has not been especially reassuring." This suggests that while China is successfully forging new economic pacts, underlying political and strategic concerns remain a significant hurdle for its long-term ambitions.

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Inflation Returns To A Multi-Quarter High

Australia’s consumer inflation reached 3.6 percent year on year in the fourth quarter of 2025, marking its highest level in six quarters and accelerating from 3.2 percent in the previous quarter. The result aligned with forecasts from economists surveyed by Reuters, suggesting price pressures remain persistent rather than transitory. On a quarterly basis, inflation increased by 0.6 percent, a notable moderation from the 1.3 percent rise recorded in the third quarter, yet still sufficient to keep inflation well above the policy target.

December data added to the inflationary picture, with prices rising 3.8 percent year on year, exceeding the 3.55 percent consensus estimate. This outcome highlights that underlying price momentum continues into the end of the year rather than easing as hoped.

Housing And Consumption As Key Price Drivers

According to the Australian Bureau of Statistics, housing costs were the largest contributor to December’s inflation, increasing by 5.5 percent. This reflects ongoing pressures from rents, construction costs, and broader supply constraints in the housing market. Food and non-alcoholic beverages also added to price growth, alongside recreation and culture, indicating that inflationary pressures are spread across both essential and discretionary spending categories. The breadth of these increases suggests correlation across consumption sectors rather than isolated price shocks.

The inflation outcome strengthens expectations that the Reserve Bank of Australia will maintain a cautious monetary policy stance. Shier Lee Lim, Lead FX and Macro Strategist for Asia Pacific at Convera, noted that while a rate hike at the February policy meeting appears unlikely, further tightening cannot be dismissed if inflation remains sticky and continues to exceed the target range in coming quarters. The RBA’s mandate is to keep inflation between 2 percent and 3 percent, a threshold inflation has now exceeded for an extended period.

Why Inflation Is Still Too High For Rate Cuts

Recent commentary from RBA officials underscores why rate cuts remain improbable. Deputy Governor Andrew Hauser described inflation above 3 percent as “too high,” emphasizing that current levels fall outside the bank’s mandate. He indicated that the probability of near-term rate cuts is very low, reinforcing the signal that monetary policy will stay restrictive until inflation convincingly returns to target.

These remarks align with earlier statements from RBA Governor Michele Bullock, who said in December that rate cuts were not on the horizon, citing improving private-sector activity and growth increasingly driven by private rather than public demand.

Economic Growth Adds Complexity To Policy Outlook

Australia’s economy expanded by 2.1 percent in the third quarter, accelerating from a revised 2 percent in the second quarter and marking its fastest pace in nearly two years. This growth momentum complicates the policy outlook, as stronger economic activity can sustain demand-driven inflation. While growth itself is not a direct cause of inflation, its correlation with rising demand supports the RBA’s reluctance to ease policy prematurely.

Taken together, persistent inflation, resilient growth, and broad-based price pressures suggest that monetary policy in Australia is likely to remain tight for longer, with any rate cuts this year expected to be limited and highly conditional on clearer evidence of disinflation.

Source: CNBC

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A Landmark Agreement Two Decades in the Making

India and the European Union have unveiled what both sides describe as a landmark free trade agreement, aiming to remove or reduce tariffs on more than 90% of goods exchanged between them. After nearly twenty years of negotiations, the pact signals a strategic shift in how major economies recalibrate supply chains amid rising protectionism elsewhere. India has agreed to ease tariffs in politically sensitive sectors such as agriculture and automobiles, while the European Union will lower barriers for Indian exports including textiles, leather goods, marine products, and gems and jewelry.

From a structural perspective, this agreement reflects a causal response to the fragmentation of global trade. As tariff risks rise in other corridors, especially those linked to the United States, both India and the EU are seeking to lock in market access and reduce long-term uncertainty through bilateral frameworks.

Strategic Context in a Fragmenting Global Trade System

The EU–India deal does not exist in isolation. It emerges alongside a broader wave of bilateral engagement as countries diversify economic partnerships. Recent high-level visits by Canada and the United Kingdom to China illustrate a parallel trend of governments hedging against overreliance on any single trade partner. These developments correlate with Washington’s increasingly assertive use of tariffs as a foreign policy instrument rather than serving as their sole cause.

European Commission President Ursula von der Leyen famously described the agreement as the “mother of all deals,” underlining its symbolic and economic significance for Europe’s trade strategy in Asia. For India, led by Prime Minister Narendra Modi, the pact reinforces the country’s ambition to position itself as a manufacturing and export hub amid shifting global supply chains.

The US Factor and Trump’s Unpredictable Shadow

Despite the celebratory tone in New Delhi and Brussels, the agreement’s future is complicated by the stance of the United States under President Donald Trump. Trump has yet to publicly comment on the EU–India pact, a silence that markets and policymakers view with caution rather than comfort. His administration has previously imposed higher tariffs on Indian goods, including levies linked to India’s energy purchases from Russia, and has escalated rhetoric toward the EU on unrelated geopolitical issues.

Recent criticism from US Treasury Secretary Scott Bessent regarding the EU’s outreach to India further reinforces the perception that Washington views such agreements through a competitive lens. The relationship here is primarily causal: US tariff pressure incentivizes other economies to deepen bilateral ties, yet those same ties risk provoking retaliatory or punitive responses from Washington.

A Counterbalance Through US–India Negotiations

There are, however, signs that US–India relations may offset some of this uncertainty. India’s Minister of Petroleum and Natural Gas indicated that New Delhi and Washington are at an advanced stage of finalizing a separate trade agreement. If concluded, such a deal could reduce the likelihood that the EU–India pact becomes a direct target of US trade action, introducing a stabilizing counterweight rather than eliminating risk altogether.

This dynamic illustrates a complex interplay rather than a single cause-and-effect chain. The EU–India deal strengthens India’s bargaining position with the US, while parallel US–India negotiations may, in turn, shape how aggressively Washington responds to Europe’s expanding role in South Asia.

Market Implications and Relative Trade WeightFrom a trade-weight perspective, India remains a modest partner for the EU, accounting for 2.4% of the bloc’s total goods trade in 2024, far below the shares of the US, China, or the UK. Conversely, the EU ranks among India’s largest trading partners, alongside the US and China, giving the agreement disproportionate importance for New Delhi’s export strategy.

Financial markets have reacted positively in Europe, with stocks rising following the announcement, suggesting a short-term confidence effect that correlates with improved trade visibility. Whether this optimism translates into sustained economic gains will depend on implementation, political follow-through, and external pressures from the US trade agenda.

While the EU–India free trade agreement has crossed a historic milestone, its real test lies ahead. Implementation challenges, domestic political sensitivities, and the unpredictable nature of US trade policy mean the story is far from finished. In a world where trade is increasingly shaped by strategic leverage rather than pure economics, the pact represents progress, but not closure, in the evolving balance of global commerce.

Source: CNBC

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A Trade Deal Under Pressure From Delays

Tensions between Washington and Seoul have escalated as the Trump administration signals impatience with South Korea’s progress in fulfilling commitments made under a trade pact announced in July last year. Under that agreement, US tariffs on South Korean goods were set at 15%, yet US officials now argue that Seoul has moved too slowly on key legislative and policy steps required to formalize investment and market-access promises. This perceived delay forms the core rationale behind President Donald Trump’s threat to raise tariffs to 25%, a move that, while not yet implemented, has already unsettled markets and exporters.

The causal logic articulated by US officials centers on reciprocity. From Washington’s perspective, maintaining lower tariffs becomes increasingly difficult when the counterpart has not delivered parallel reforms. South Korean authorities, however, point to domestic political gridlock and economic concerns such as capital outflows and currency volatility as factors slowing the passage of enabling legislation, suggesting correlation rather than deliberate obstruction.

Digital Services Regulations Add a Second Fault Line

Alongside trade implementation issues, frustration over South Korea’s digital-services regulations has deepened bilateral unease. US officials have repeatedly raised concerns that new Korean laws may disproportionately affect American technology firms. Vice President JD Vance recently warned Seoul against actions that could penalize US companies, including Coupang Inc., which has faced heightened scrutiny following a major data breach disclosed in November that affected roughly two-thirds of South Korea’s population.

Seoul has consistently rejected accusations of discrimination, emphasizing that its digital regulations are applied uniformly and are not designed to target US firms. Both sides stress that these regulatory disputes are formally separate from the tariff threat, yet their coexistence has amplified overall mistrust. In analytical terms, the relationship here is largely correlational: regulatory tensions intensify the broader climate of dissatisfaction but are not cited as the direct trigger for tariff escalation.

Negotiations Resume Amid Political Uncertainty

US Trade Representative Jamieson Greer confirmed ongoing talks with South Korean officials, with further discussions scheduled in Washington. Greer publicly highlighted unmet commitments in investment, agriculture, industry, and digital policy, framing them as obstacles to sustaining the existing tariff framework. At the same time, President Trump struck a more conciliatory tone, suggesting that the dispute could be resolved quickly through negotiation.

This episode reflects a broader pattern in Trump’s second term, where tariff threats are frequently used as leverage to accelerate compliance, though not all such threats are ultimately enforced. Bloomberg data indicate that only about 27% of similar warnings since late 2024 have been fully executed, underscoring uncertainty about whether the proposed 25% tariff will materialize.

Potential Economic Impact on Key Exporters

Should higher tariffs be enacted, the economic consequences could be significant. Major South Korean exporters, including Hyundai Motor Co., which shipped 1.1 million vehicles to the US in 2024, would face increased costs and potential competitiveness pressures in the American market. This represents a clear causal risk: tariff increases would directly raise export costs and could disrupt supply chains built around preferential access.

For now, the standoff illustrates how implementation delays, domestic legislative constraints, and regulatory disagreements can converge to strain even recently concluded trade agreements. Whether the threatened tariff hike becomes reality will depend on the speed and substance of South Korea’s policy response and Washington’s willingness to accept incremental progress rather than immediate compliance.

Source: Bloomberg

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Senior U.S. and Taiwanese officials have concluded a high-level dialogue focused on deepening cooperation in artificial intelligence, technology, and drone manufacturing. The meeting marks the sixth round of the U.S.-Taiwan Economic Prosperity Partnership Dialogue, a forum initiated during the first Trump administration.

The U.S. State Department praised Taipei as a "vital partner," reaffirming America's role as Taiwan's most crucial international supporter despite the absence of formal diplomatic ties.

Securing the Future of Tech

The talks, led by U.S. Under Secretary for Economic Affairs Jacob Helberg and Taiwan's Economy Minister Kung Ming-hsin, underscored a mutual commitment to securing critical technology supply chains.

Kung Ming-hsin, Taiwan's Minister of Economic Affairs, led the Taiwanese delegation in talks focused on technology and supply chain security.

Both sides signed statements advancing the Pax Silica Declaration, a U.S.-led initiative designed to safeguard AI and semiconductor supply chains. The State Department noted that "Taiwan's advanced manufacturing sector plays a key role in fuelling the AI revolution."

Discussions also covered key strategic areas, including:

• Supply chain security as it relates to AI

• Certification standards for drone components

• Cooperation on securing critical minerals

Expanding Economic and Security Cooperation

The dialogue extended beyond technology to address broader economic challenges and security concerns. Officials focused on developing strategies to respond to economic coercion and identified opportunities for mutual cooperation in third countries.

A significant point of discussion was the need to address tax-related barriers to increase investment. Taiwan, a global leader in advanced semiconductor production, has long advocated for an agreement to prevent double taxation, arguing it would stimulate bilateral investment.

The talks also addressed the security of critical infrastructure, including undersea cables and the use of low-Earth-orbit satellites. Taiwan has previously accused China of involvement in damaging its undersea telecom and internet cables, a charge Beijing denies. In response, Taiwan is expanding its satellite capabilities to ensure backup communications.

Geopolitical Context and Recent Deals

These discussions follow a separate deal reached earlier this month between Taiwan and the U.S. to cut tariffs on Taiwanese exports and encourage Taiwanese investment in American semiconductor and technology sectors.

Officials hold a press conference to brief the public on the outcomes of Taiwan-US tariff negotiations.

According to Taiwan's economy ministry, both sides agreed that peace and stability across the Taiwan Strait are "crucial to global economic security and prosperity."

China consistently objects to official interactions between Washington and Taipei, viewing Taiwan as an internal affair and a red line. Taiwan's government, however, rejects Beijing's sovereignty claims, maintaining that only the island's people can determine their future.

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Presidential rhetoric shifts currency expectations

The dollar extended its sharp selloff after Donald Trump told reporters in Iowa that he was unconcerned about the greenback’s recent slump, calling the situation “great” and arguing that U.S. business activity remains strong. These remarks arrived at a sensitive moment for currency markets, where investors were already reassessing assumptions of dollar stability amid policy volatility. Trump’s comments were widely interpreted as an implicit endorsement of a weaker currency, lowering the psychological barrier for traders to maintain or add to short-dollar positions.

Following his remarks, the Bloomberg Dollar Spot Index fell as much as 1.2%, with the U.S. currency weakening against all major peers before stabilizing somewhat in Asian trading. Since Trump’s inauguration, the index has dropped close to 10%, marking one of the steepest post-inaugural declines in recent history.

Policy unpredictability and investor confidence

The dollar’s weakness cannot be explained solely by short-term market mechanics. Trump’s broader policy posture including repeated tariff threats, pressure on the Federal Reserve, large tax cuts that have widened the fiscal deficit, and confrontational diplomacy has unsettled overseas investors. While rising Treasury yields and expectations that the Federal Reserve will pause rate cuts would typically support the dollar, those traditional relationships have weakened as political risk has taken center stage.

Treasury Secretary Scott Bessent has sought to separate the dollar’s exchange rate from its status as the world’s primary reserve currency. However, market participants appear increasingly focused on price action rather than institutional assurances, particularly as Trump has reiterated his preference for much lower interest rates, a stance that structurally undermines currency support through narrower yield differentials.

The debasement trade gathers momentum

As confidence in the dollar has eroded, capital has flowed into alternative stores of value. Gold has surged to record highs, becoming a central beneficiary of what investors now describe as the “debasement trade,” in which assets perceived as insulated from fiscal and political interference attract growing demand. At the same time, emerging-market funds have seen record inflows, reflecting a gradual diversification away from U.S.-centric portfolios.

This shift is not purely causal but strongly correlational. While Trump’s rhetoric does not mechanically force the dollar lower, it amplifies existing vulnerabilities by reinforcing expectations that policy stability is no longer a priority. As a result, even modest negative shocks can generate outsized currency moves.

Options markets and positioning signal further downside

Derivative markets suggest that traders expect the dollar’s slide to continue. Premiums on short-dated options that profit from further dollar weakness have climbed to their highest levels since data collection began in 2011. Turnover in currency-related instruments has also surged, with clearing volumes at the Depository Trust & Clearing Corporation reaching their second-highest level on record earlier this week.

Nomura strategist Dominic Bunning noted that while rate differentials still nominally favor the dollar against several peers, geopolitical and policy antagonism is now the dominant driver. This represents a structural change in market behavior rather than a temporary dislocation.

A deliberate ambiguity with long-term risks

Trump has long held conflicting views on the dollar, alternating between praising its strength as a negotiating tool and promoting weakness as a boost for manufacturing competitiveness. His latest remarks lean decisively toward the latter interpretation. While a softer currency may support exports in the short term, economists warn that prolonged or disorderly depreciation risks undermining financial stability and accelerating capital flight.

For now, markets appear to be taking Trump at his word. With policy signals pointing toward tolerance of further declines, the dollar’s recent weakness looks less like an overshoot and more like a repricing of U.S. political risk in global currency markets.

Source: Bloomberg

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Japan's Bond Auction Soothes Nerves Amid Election Jitters

A Market Breather After Political Shock

Election Risks and Fiscal Concerns Loom

Yen Strengthens on Intervention Talk

China's Global Trade Pivot Amid US Pressure

Figure 1: British Prime Minister Keir Starmer meets with Chinese President Xi Jinping, highlighting a trend of Western leaders seeking stronger economic ties with Beijing.

Forging New Alliances as US Relations Cool

Shifting Trade Flows and Economic Resilience

Financial Markets and the Yuan's Growing Influence

Figure 2: Chinese equities, represented by the MSCI China and Shanghai Composite indices, have significantly outperformed the U.S. S&P 500 over the past year.

Figure 3: The Chinese Yuan's performance against the U.S. dollar, showing a notable appreciation in 2025 as its global usage expands.

Skepticism Remains Despite New Trade Deals

Australia Inflation Climbs To 3.6 Percent As Policy Easing Remains Distant

Inflation Returns To A Multi-Quarter High

Housing And Consumption As Key Price Drivers

Why Inflation Is Still Too High For Rate Cuts

Economic Growth Adds Complexity To Policy Outlook

Source: CNBC

The EU–India Trade Pact Faces Its Final Test in a Trump-Dominated Trade Order

A Landmark Agreement Two Decades in the Making

Strategic Context in a Fragmenting Global Trade System

The US Factor and Trump’s Unpredictable Shadow

A Counterbalance Through US–India Negotiations

Source: CNBC

US–South Korea Trade Frictions Intensify as Implementation Gaps and Tech Rules Collide

A Trade Deal Under Pressure From Delays

Digital Services Regulations Add a Second Fault Line

Negotiations Resume Amid Political Uncertainty

Potential Economic Impact on Key Exporters

Source: Bloomberg

US-Taiwan Talks Target AI, Chips, and Supply Chains

Securing the Future of Tech

Kung Ming-hsin, Taiwan's Minister of Economic Affairs, led the Taiwanese delegation in talks focused on technology and supply chain security.

Expanding Economic and Security Cooperation

Geopolitical Context and Recent Deals

Officials hold a press conference to brief the public on the outcomes of Taiwan-US tariff negotiations.

Trump Signals Comfort With a Weaker Dollar, Deepening Market Concerns

Presidential rhetoric shifts currency expectations

Policy unpredictability and investor confidence

The debasement trade gathers momentum

Options markets and positioning signal further downside

A deliberate ambiguity with long-term risks

Source: Bloomberg

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