According to ChainCatcher news and Jin Ten data, some asset class investors are gradually reducing their enthusiasm for the 'Trump trade' as they question whether Trump will push his ambitious tariff proposals after becoming President of the United States. As of Thursday's close, the dollar had erased most of its post-election gains, and after two days of wild fluctuations, U.S. Treasury yields have also returned to recent ranges. These moves indicate that as investors weigh whether Trump's policies align with his campaign promises, the market may experience volatility. With market turbulence calming down, the focus is shifting to other significant events.
Singapura Ruisui Bank's Chief Economist and Strategist Vishnu Varathan stated, “Now even the most fervent 'Trump trade' investors are stepping back and pondering whether the stakes are too high at this point? Traders are contemplating the execution situation and how some of his policies might effectively spread.” A key question for investors is how much of Trump's tariff measures will become a reality. Some are also taking profits, including bullish dollar and bearish Treasury trades, which performed well earlier this week due to expectations that Trump's policies would spur inflation and keep interest rates elevated.
Alvin Tan, Chief Foreign Exchange Strategist at Royal Bank of Canada Capital Asia, stated, “People are skeptical about whether Trump will actually implement the policies he proposed, especially the tariff policies; however, this sentiment may be temporary, as the market underestimates Trump's influence on trade policy — the President of the United States has broad powers to impose import tariffs.”