For a generation, Asia's economic engine ran on a simple loop: export to the U.S., recycle the surplus into Treasuries and Wall Street paper, and ride the tailwinds of American growth.
I agree with all of this. The world is overloaded with US Treasuries, US mortgage bonds, US assets. If they are going to move away from the dollar, other currencies will need to appreciate. We can’t have rounds of competitive devaluations. The one place that can absorb those flows is foreign and homegrown equities.
There needs to be a plan to focus those flows to strengthen domestic initiatives or pay down debt. Has to be slow movements to not rock the boat.
Media editors, especially those at Bloomberg, are clearly sending reporters out to hunt for voices that fit the “abandoning America” or " Sell America" narrative, especially after the TWD breakout. However, from my perspective, I don't know a single serious allocator who is dumping U.S. markets outright. I ran a book in Singapore for 2 decades and know many of the players in Asia. What I do see—and fully get—is increased diversification. Nobody's flying a single flag anymore; they’re chasing juice. Traders, hedge funds, asset managers—we’ll go wherever the volatility premium pays, simple as that.
I’m trading the narrative in the wake of the TWD move and leaning into the idea that both the U.S. Treasury and Trump quietly prefer a stronger JPY and CNH. That, to me, is the underpriced tail risk in FX right now. And let’s be honest—if the yen and the yuan start to firm up, the rest of Asia FX isn’t just going to sit on the sidelines. They'll get dragged higher too, like it or not. This could morph into a broader unwind of the dollar’s dominance across the region. However, in this market, conviction must remain flexible—because tail risks don’t send invitations, they either show up or they don't.
All good points. With Nvidia’s beat today we’ll see more US market juice. Underneath the surface I see financial conditions tightening. Small businesses closing, loans harder to get, people leaving. People borrowing to pay normal bills. It seems anecdotal. #TACO is a thing. Traders figured it out after a month. I went to Costco and it was double what we usually spend. There will be inflation and consumption softening.
I agree with all of this. The world is overloaded with US Treasuries, US mortgage bonds, US assets. If they are going to move away from the dollar, other currencies will need to appreciate. We can’t have rounds of competitive devaluations. The one place that can absorb those flows is foreign and homegrown equities.
There needs to be a plan to focus those flows to strengthen domestic initiatives or pay down debt. Has to be slow movements to not rock the boat.
Media editors, especially those at Bloomberg, are clearly sending reporters out to hunt for voices that fit the “abandoning America” or " Sell America" narrative, especially after the TWD breakout. However, from my perspective, I don't know a single serious allocator who is dumping U.S. markets outright. I ran a book in Singapore for 2 decades and know many of the players in Asia. What I do see—and fully get—is increased diversification. Nobody's flying a single flag anymore; they’re chasing juice. Traders, hedge funds, asset managers—we’ll go wherever the volatility premium pays, simple as that.
I’m trading the narrative in the wake of the TWD move and leaning into the idea that both the U.S. Treasury and Trump quietly prefer a stronger JPY and CNH. That, to me, is the underpriced tail risk in FX right now. And let’s be honest—if the yen and the yuan start to firm up, the rest of Asia FX isn’t just going to sit on the sidelines. They'll get dragged higher too, like it or not. This could morph into a broader unwind of the dollar’s dominance across the region. However, in this market, conviction must remain flexible—because tail risks don’t send invitations, they either show up or they don't.
All good points. With Nvidia’s beat today we’ll see more US market juice. Underneath the surface I see financial conditions tightening. Small businesses closing, loans harder to get, people leaving. People borrowing to pay normal bills. It seems anecdotal. #TACO is a thing. Traders figured it out after a month. I went to Costco and it was double what we usually spend. There will be inflation and consumption softening.