From Davos to Tokyo
JGBs continue to reprice higher, Europe turns to China, and safe havens lead.
It’s been quite an eventful week so far. Takaichi, as expected, called an election for February, and JGB markets aren’t quiet on how they feel about Takaichinomics over the long term. The Greenland 8, a cohort of NATO allies now in Trump’s crosshairs, are all rubbing shoulders in Davos, with Macron openly welcoming Chinese investment in Europe. All of this is underway amid a resurgence of the “Sell America” trade, now dubbed “Bye, America” for its second chapter.
On the latter, the real question is whether we’re about to see a continuation of a positive-correlation shock (stocks, bonds, and the dollar down) as foreign holders ditch the US further. Europe has relatively few effective levers against Trump’s America, but targeting US assets is one way that the Trump economic bloc will feel pain. For those who want to read more about these events, we wrote a few words in our secondary publication:
