Halister News

(Bloomberg) -- Momentum-driven strategies have run the show through November and it’ll be a brave investor to bet against them ahead of the U.S. presidential inauguration on January 20.

• Some asset moves since U.S. election day may look overextended, yet investors have an opportunity for policy extrapolation on a grand scale during this power vacuum
• Treasury 10-year yields have jumped, partly on the possibility of increased fiscal spending in 2017 and beyond
• When yields hit 2.41% last week, it marked a stunning 70bps rise from the low point on Nov. 9. But this is still well below a 50% retracement of the cyclical decline since 2007 at 3.32%; chart here
• USD/JPY is up more than 7% in November, heading for its biggest monthly advance since 2009. Yet, one year ago USD/JPY was at 123.00 and nobody was talking about Trump as president; chart here
• Similarly, the 5% gain for Japan’s Nikkei 225 in November still leaves it lower than a year ago
• Gold’s decline this month has reached the 61.8% Fibonacci retracement of the past year’s range. But a year ago when 10-year Treasury yields were 2.21% vs 2.30% now, gold was below $1,100 an ounce; chart here
• For investors who like to go with the flow, let the trend be your friend. There are still seven weeks until inauguration day.
• NOTE: Mark Cranfield is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.