Why The World Started Hedging Its US Dollar Exposure

Bullish:

• $TECH - US technology companies remain fundamentally attractive despite dollar and sovereign risk concerns, representing the most profitable and cutting-edge companies globally

  • “The most profitable, impressive cutting edge companies in the world that everyone would love to have exposure to in some way are in The US.”

    Joe·20:14
• $GLD - Gold's unique characteristic as an asset not tied to any particular liability, with central banks as major buyers, though behaving more like a speculative risk asset recently

  • “Gold is one of those, which is not the liability of any particular individual.”

    Hyun·40:53
• $EM - Emerging market assets have rallied significantly due to dollar weakness providing a tailwind throughout the year

  • “The weaker dollar has been a tailwind for much of the year. This is why emerging market assets have really, you know, rallied quite hard.”

    Hyun·35:44

Bearish:

• $TLT - Rapid growth in government bond issuance compared to private sector credit suggests potential systemic risk in government debt markets

  • “The really rapidly growing element has not been credit to the private sector. It's been credit to the government, and in particular, the government bond market.”

    Hyun·43:37