Trump, China and bond market sell-off - trades to kick off 2017 - SocGen

Kit Juckes, global strategist at Societe Generale, discusses simple trade ideas to kick-off 2017.

Key Quotes:

“A nagging sense that then bond market adjustment that is now underway has further twists and turns in store as borrowers and FX hedgers scramble for dollars.”

“There are loads of emotions that can dominate the market moods in the days ahead, and lots to ponder. I thought I might capture some of these themes in very simply trade ideas to start 2017.”

“Buy USD/KRW - The dollar's on a run but it's some 7% weaker in real terms against the Korean won than it was at the start of 1999, and 20% weaker than it was in early 2009. Korea struggles with modest growth, an ageing population, an expensive currency and proximity to China. “

“Pay 20-year GBP - The simplest UK trade this year is to go short of longer-dated gilts, or pay 20year swaps. More inflation and deteriorating public finances along with uncertainty about Brexit, looks like a toxic mix. I think we could see 2% in 10year gilts, and 30s over 2.5%.”