“Global Trade Has Been Twisted Into An Evil”: Trader

Here’s a bit of characteristically brilliant commentary on the election and global trade from Bloomberg’s Richard Breslow…

You’re going to hear a lot of people telling you tomorrow this is “risk on” or “risk off”. That’s supposed to tell you exactly how to trade. Everything. It’s probably wise to take this as more a reflection of a world view than a bankable blanket portfolio allocation directive.

Remember, those descriptions were born from another one. “Bad news is good news”

Over the course of this election cycle, a lot of assets, especially currencies, have been pushed around and out of place. Global trade has somehow been twisted into an evil to be stamped out. With many of the presumed ramifications priced in. And this is just one sorry example. How these get wound or unwound won’t have everything moving in lock-step

A December rate hike is pretty well assumed and baked in the cake. And nothing for next year? Something is wrong with this scenario. The Fed’s communication strategy just isn’t that good. If the Fed is hiking just to prepare for the next recession — they shouldn’t. If things are really picking up — inflation — then 2017 expectations are all wrong and bonds are mis-priced

Global bond yields backing up at varying rates will continuously affect the relative attractiveness of all sorts of things

In a risk-on scenario, it’s considered de rigueur to lay in some Aussie dollar. With the currency pushing the highs, you had better have very positive views on China. Yes, that one having a good run of numbers, but increasingly opaque, assertive and bleeding reserves

The SPX index is back in a very well-defined range. It’s the break-out that will matter for a sustained position, not the zig-zags

And then I was left wondering why amid Monday’s market euphoria, EURCHF was pasted back toward multi-month lows. Be careful following the most obvious advice. It’s your P/L

Elections have consequences. And this one has them beyond who wins. The U.S. hasn’t distinguished itself on the world stage with this display. How the Western hegemony weathers the storm may be the most lasting trading theme going forward

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