By Marc Jones
London (Reuters) -after the President of the ABD Donald TrumpRadical campaign promises, investors knew that the markets would be bumpy this year as they returned to lead the world’s largest economy. However, almost no one predicted the result, especially the dramatic decline of the dollar.
Go through the numbers of the year without watching the journey and many key markets seem calm.
World stocks at record levels, comparison global borrowing costs have fallen, and the market, such as Vix, was called “horror indicators”.
But look more closely and the turmoil is clear: all these markets have seen excessive fluctuations for the last six months – and then the dollar.
The world’s reserve currency is over 10%. The largest first half dive since the beginning of the period of free -floating currencies in the early 1970s has increased by 25% since then, which points to the end of the Bretton Woods system.
Vincent Mortier, Amundi, the largest asset manager in Europe, reduces this to Trump’s trade war, especially the president’s US deficit to what he calls the “big beautiful” financial invoice that will hold the US deficit of 6-7% and 36.2 trillion dollars.
“This weakness of the first half for the market and what the orbit of the dollar should be.” He said.
It was also the struggles of the eye -catching “magnificent seven” technology giant. They have been a cash cow for portfolios for years, but this year, Chinese competitors have been left for dust with a 20% rally and an increase in European weapon manufacturers with a 70% increase.
The second move was directed by Trump. The signal that the US will return Europe’s military protection forces the region and other NATO members to stop again.
Although Germany’s long -term US debt concerns and the highest record Japanese borrowing costs have directed most moves since then, the initially initially imposed debt braking plan to allow higher defense spending of the global bond market of $ 140 trillion.
Considering the problems of the dollar, the comparison will lose money for most of the US debt this year.
The 30 -year treasury returns emphasizing volatility has increased by 5.1% since 2007 in May, but already returned to 4.8%. Meanwhile, Switzerland reduced interest rates to zero this month.
Great rotation?
The collapse of the dollar also means 12.5%of the euro, Japan’s yen approximately 8%and Swiss francs increased by 13.5%. It also gave the chance to shine developing markets.
Trump’s re -interaction with Russian President Vladimir Putin helped 40% to fluctuate rubles, but he was severely restricted by Western sanctions, and still holds 42% tear in Ghana’s Cedi’s Cedi.
In Eastern Europe, Poland’s zloti, Czech crown and Hungarian Berin are all between 13-17%. Taiwan’s dollar increased by 8% in just two days last month, and Mexico’s PESO and the developing market local money debt, despite all trade war trauma, benefits from double -digit gains throughout the year.
Pramol Dhawan, President of Pimco’s developing market portfolio management, Pamco’s developing market portfolio management president, who refers to the transition from US assets and refers to other markets, “This is the most important capital rotation we have seen for the best part of the twenty years.
“And we still think we’re in the first strokes.”
At the bottom of the fx pile, there are familiar names such as Argentine pesos and Türkiye’s lira. The second fell by about 11%, and most of them took place after Turkish President Tayyip Erdoğan’s main political rival was detained in March.
Bitcoin changed as usual. Trump increased almost 20% when he took office, he left about 30% when a US did not affect crypto currency reserve plans and spent the last three months over again.
Oil is also yo-yoed. Trump’s comprehensive tariff plan fell below a 30% barrel in April after fueling global stagnation fears, but this month, Israel and the United States bombed Iran over $ 80.
As good as gold
Copper met the concerns of the global economy against 11%skipping, but shining precious metals. Silver increases by 24% gold and neck and neck, Platinum increases by about 50% after a 10 -year series.
The second half will not have much time for ventilation. Trump wants to skip the “great beautiful bill” in spite of the US Congress until the Independence Day holiday of July 4, and the ceasefire in the global trade war ends five days later.
Works with neighboring Canada already start and as the deadline approaches – and so far mutually, with inadequate progress for the agreded base line taxes – the questions of how much the markets may be matched to risks continue.
(Additional reporting by Yoruk Bahceli. Editing by Amanda Cooper and Mark Potter)
