Please find below the net returns for November 2024.
With Trump voted in we turned all strategies back on part way through November.
Even though Trump is not in power yet, announcements from Trump continue to move markets. Soon as the tariffs were announced it was assumed the US economy would be booming whilst countries impacted by the tariffs would suffer.
Whilst I see some impacts, but doubt it will to the level the markets have priced in. For example, the US cannot produce all products to be US made and will rely on other countries to provide the parts required. This just means these products will be more expensive to produce and purchase.
Similarly, the tariffs are designed so the imported products are priced at the same level as US made products. If you can currently buy these items cheaper, but once the tariffs are introduced, it will cause cost of living issues due to now being more expensive.
The above are only some examples. If the solution were easy as increasing tariffs, other US presidents would have done this before.
Besides Trump announcements, all other news events have taken back seats. Part of this is the lead into Christmas when markets slow down along with start of January. With Trump coming into power in February we might see little movement in markets until he takes power and see decisions put in place.
We will look to try and turn strategies off sometime in December to open again in the new year. We are currently holding trades in NZDUSD and USDCAD and accruing negative swaps as we are unable to exit the positions. We might be holding these for a while longer until the markets decide the recent tariff announcements are not as large market impact as being made out to be.
If you have any queries, please do not hesitate to come back to me.
