Investors mobilize market whiplash for weeks after wildcard events
By Naomi Rovnick and Lucy Raitano
LONDON (Reuters) – Big investors are mobilizing to trade in weeks packed with wild card events, from money to corporate credit, for assets considered to be exposed to both money and negative surprises.
The US Treasury Department, dollar, yen and eurozone debt could also be volatile, investors said Thursday’s U.S. employment data will be followed by US European Union tariff deadlines next week, and an unpredictable French budget voting. The market has since faced an August 12 deadline for US-China talks to achieve the trade contract.
“I can’t think of time in the market in my history. It’s been quite long, very low risk and very few risk premiums,” says investment expert Insight Investment Head, who refers to compensation for holding assets that are more risky than cash.
Here’s how investors bet on potential market flare-ups in days and weeks.
The trembling of tariffs
Russell Investments Global Head of Solutions Strategy Van Luu said market participants were priced slightly positive results on July 9, with the US and the EU either settling on universal tariffs of 10% or the US postponed the resolution just like China.
He said he was negative about the company’s credibility as yields underestimated the economic risks of ongoing tariff uncertainty.
The worst-case scenario is at a dead end, as Brussels is now seeking exemptions from the major EU export sector, and markets are beginning to fear mutual tariffs, he said.
Amundi Global Head of Macromahmoud Pradhan, former deputy director of Europe, said the July 9 outcome was a coin toss, but the benign results already price risky assets.
Global stocks have rebounded since April 8 lows, rising 24%, shortly after President Donald Trump delivered a bomb bomb about imports from around the world on April 2nd.
“There may not be any further advantage given the gatherings we had,” Pradhan said.
Dollar, Ministry of Finance, Gold
The July 9 results could hit the dollar and cause currency volatility, investors said. Greenback has already fallen by about 10% against other major currencies so far this year.
The Treasury will suffer if the Treasury Department collapses due to threats to global trade, Liam O’Donnell said. The long and steady accumulation of the Ministry of Finance by foreign investors and central banks has been driven in part by the dominant position of the dollar in global trade flows.