Market Perspectives | Sailing MAGA 2.0

In Kürze

Trump’s MAGA agenda keeps its tight grip on financial markets. Following a global bond sell off in December amid US price and tariff worries, Trump’s inauguration has brought some relief. European equities rallied in January and the USD took a breather (left chart) as Trump’s flurry of executive orders avoided much-feared universal tariffs.

Highlights:

  • Trump’s MAGA agenda keeps markets on edge. His reluctance to impose universal tariffs immediately after inauguration has provided some relief.
  • Political uncertainty and volatility will remain high, but our core assumption remains that Republicans will want to avoid creating another large inflation shock. We maintain a moderate pro-risk tilt amid a still conducive backdrop of solid global growth, further rate cuts and receding inflation.
  • Our preference is for IG Credit and to a lesser extent for Equities, at the expense of Cash. We increase duration exposure in the EA as the drag from lower inflation, economic stagnation and further ECB rate cuts will partially unwind the recent rise in yields.
Market Perspectives | Sailing MAGA 2.0
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