Bloomberg Surveillance DeepSeek Artificial Intelligence, Trump Tariffs and Oil
Jan 28, 2025
Ian Lyngen, Head of US Rates at BMO Capital Markets, shares his expertise on the evolving bond market and fixed income dynamics. He dives into the impact of Trump’s tariffs on the oil industry and discusses the complex interplay between tariffs and currencies. The conversation also touches on the transformative role of artificial intelligence across businesses. Additionally, Lyngen explores the current climate for treasury yields amidst inflation challenges, offering insights into market predictions and investment strategies.
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Dollar Resilience
- The dollar shows resilience despite expectations of tariffs.
- Trump's pro-tariff stance contributes to this resilience.
Fixed-Income Investment Flows
- There's a reduced appetite for U.S. fixed-income investments, particularly from Japan and Europe.
- Increased hedging costs and political risks contribute to this decline.
Yen and Hedging Costs
- As hedging costs decrease, Japanese investors are incentivized to hedge more, leading to yen buying.
- This traditional risk-off dynamic can impact yen performance.