Pick Your Longs Carefully
There is very little doubt that the market will continue to chase risk-on in the coming weeks to take advantage of a conservative Fed and fiscal stability. Yet, we would argue that such has been the ferocity of the ‘risk back on’ trade that suddenly it has become consensus. While we remain sympathetic with the overall view, we believe markets should remain selective about the potential longs and be particularly wary of currencies where valuations may look stretched.
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