Please find below the net returns for December 2024.
19 December 2024 – Jeremy Powell adjusted his stance on the number of times the US interest rates will occur in 2025. This adjustment caused markets to go insane. We had equity markets dropping by over 2% in minutes, forex pairs heavily impacted if linked to the US and the market not understanding what this now means for 2025.
Trump has made it clear he wants to fire Powell and wants interest rates to continue to decline. Hard to not see this might be a power play to let Trump know who is in control when it comes to the markets.
Currently the US dollar is flying, and it is all speculation that Trump will turbo charge the US economy with his new policies. But the other way you could look at this is Trump is acting as a bully and the only way forward is his way. Examples of this are the expected new tariffs, demanding the EU state publicly they will buy more US oil and gas otherwise more tariffs will occur, ignoring or taking advantage of relationships built over centuries with US friendly counties, focused only on large businesses and ignoring the employees and their rights and making out he will stop the wars as if he is ultimate decision maker.
Whilst the US economy is large – it does not work without the rest of the world supporting it. China is currently experiencing this as they have a leader that believes they run the world, and the policies introduced have impacted their economy. Is Trump walking the same line?
Regarding our strategies, we currently have 4 strategies holding positions in NZDUSD and USDCAD and they may take some time to unwind as the USD is all positive whilst NZD and CAD are all negative. All our other strategies are turned off.
Whilst we are happy with the returns we achieved for the year, the market for most of the year was flat and only really traded on interest rate news events i.e. 2 days and the balance of the month it sat idle with some road bumps along the way.
With Trump in power in 2025, expect the first 3 months he will want to show the world he is leader, and you will bend the knee otherwise suffer the consequences. Expect news events to drive the markets every time he opens his mouth. Inflation, the environment, those who criticize his decision making will not even factor into him moving forward with whatever agenda he has.
Whilst it is not the end of the month, we are not expecting any movements in our returns until next year. Final update for December is below.
Any queries, please do not hesitate to come back to us.
