Chinese leaders visited the United States last week. Even by the time the visit ended and the official readout was released, there were few concrete measures or signed agreements. Apart from the easing of trade tariffs that the market had widely anticipated, there was little of particular note. The lack of a major domestic publicity push around the visit’s outcomes is also telling. Clearly, Trump hopes to generate a series of positive developments ahead of the midterm elections to bolster his electoral prospects. In addition to the Chinese visit, there was news last week of U.S.–Iran talks, but that, too, amounted to more talk than action, with no tangible outcome yet. Any further impact on oil prices and inflation may therefore have to wait until after the midterms. For financial markets right now, the most definite development is that the Federal Reserve has begun a rate-hiking cycle. Investors should therefore focus closely on the opportunities that arise during such a cycle; as for Trump, it may be better to wait until the midterm results are in before paying him further attention.
1. Currency opportunities from U.S. rate hikes have fully materialized
I have repeatedly urged readers to watch for opportunities arising from depreciation in the euro and the renminbi, and both have now materialized. Since that call, the euro has fallen 2% against the U.S. dollar—a good start. But the medium- to long-term investment target will take time to reach. The broader target remains around parity, or EUR/USD 1:1, leaving further room to move. Investors can wait for a rebound in the euro before entering a position. The renminbi, meanwhile, is only at the beginning of a shift in its cycle, so its depreciation could continue for quite some time. Readers can take their time adjusting their asset allocations accordingly. Those interested may also trade renminbi-related futures. At present, forward renminbi futures still price in appreciation, making longer-dated renminbi futures a more attractive option.$欧元主连 2612(EURmain)$ $欧元ETF-ProShares两倍做空(EUO)$ $HK人民币主连 2612(CNHmain)$ $小型HK人民币主连 2703(MCNHmain)$ $SG人民币主连 2612(UCmain)$ $小型SG人民币主连 2612(MUCmain)$
2. U.S. stock indexes and crude oil remain relatively strong
U.S. rate hikes are only just beginning. Their first effects are being felt in foreign exchange and bond markets, but as interest rates continue to rise, the impact will gradually spread to other assets. For now, U.S. stock indexes and U.S. crude oil are among the relatively stronger markets. The midterm elections are lending support to equities, while geopolitical tensions are supporting oil. A shift into a sustained downtrend would take time and require more negative developments. I would not recommend shorting these markets at this stage; investors can wait until they break through important technical levels, such as the middle Bollinger Band, before entering.$美国原油ETF(USO)$ $WTI原油主连 2611(CLmain)$ $小原油主连 2611(QMmain)$ $微型WTI原油主连 2611(MCLmain)$ $布油现金主连 2612(BZmain)$
For now, investors can continue to roll strategies that sell short-dated call or put options on U.S. stock indexes. I would not, however, recommend selling options with longer maturities—more than two weeks—to avoid account losses caused by unexpected events.
$标普500(.SPX)$ $标普500ETF(SPY)$ $SP500指数主连 2612(ESmain)$ $微型SP500指数主连 2612(MESmain)$$纳指100ETF(QQQ)$ $纳指三倍做多ETF(TQQQ)$ $纳指三倍做空ETF(SQQQ)$ $NQ100指数主连 2612(NQmain)$ $微型NQ100指数主连 2612(MNQmain)$
3. Gold and silver remain range-bound; short-term trading beats holding for the long term
With the U.S. rate-hiking cycle just getting under way, precious metals are unlikely to perform well. A choppy, back-and-forth market is better suited to short-term speculative trades. If New York gold prices pull back to around $4,000, investors could consider buying a small amount on the dip. Any such trade, however, would be aimed only at a short-term rebound, and the rebound is unlikely to match the scale of the moves seen in August. Investors should decide whether to participate based on their own circumstances.$黄金主连 2612(GCmain)$ $黄金ETF-SPDR(GLD)$ $微黄金主连 2612(MGCmain)$ $1盎司黄金主连 2612(1OZmain)$ $白银主连 2612(SImain)$ $Silver Miners Etf(SIL)$ $微白银主连 2612(SILmain)$ $100盎司白银主连 2612(SICmain)$
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