It’s “deer in headlights” time for analysts.
After four solid months of everyone trying to persist in the ridiculous notion that a Donald Trump presidency isn’t actually as absurd a proposition as it sounds, the chickens came home to roost all at once over the last 48 hours.
Now, it’s a mad scramble to figure out what it presages for markets.
We brought you a summary of opinions from four analysts earlier this morning, and below, you can find the latest from Westpac’s Sean Callow who warns that the political risk premium that hung over the euro when Marine Le Pen was still in the running for the French presidency has been “removed and instead placed on the U.S. dollar.”
Westpac recommends shorting the U.S. dollar vs a basket comprising of the euro, yen and Canadian currency as political concerns at the White House are likely to slow down economic-policy decisions.
- “Regardless of the ultimate conclusion of the political storm over Trump’s actions on Russia and the security services, it will at the very least linger as a distraction that makes it more difficult for the White House to pass pro-growth policies,” says Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney
- Markets are losing confidence in the prospect that strong business and consumer confidence surveys will translate to hard data on the economy
- USD could lose as much as 2% against EUR, JPY and CAD by month-end, before finding some stability in June as the Fed vs ECB meetings are likely favor the greenback
- “It seems clear that a political risk premium is being removed from the euro and instead placed on the U.S. dollar”