Investment Conclusion
Japan - The Sanae Takaichi government, at the margin, means more fiscal spending. Therefore the Wealth Preservation Portfolio takes on: • More exposure to Japanese equities. • More shorts on JPG 10yrs. • And a careful watch for any change in BoJ policy on Yen longs but so far, no change.
China – the outcome of any Trump - Xi meeting, around the APEC summit, if it happens at all, may lead to a meaningful increase in geopolitical risk. This would happen if the US lessened its support for Taiwan’s “independence” as the price of a trade deal on soya!!!.
- The EU summit on using Russian assets to fund Ukraine got nowhere. Another signal to Putin to go for it!
- Czech Republic - the outcome of the Czech elections, with the populist anti- Ukrainian ANO party gaining seats in Parliament, was not a surprise. But it will embolden Putin’s escalation against Europe. European risk premia are too low.
Shipping data continue to point to very weak economic data for the US.
Intrusions by suspected Russian assets into NATO member state sovereign territory numbered 7 this week compared to 23 last week.