JPMorgan's Cavenagh Says Reflation to Dominate Markets

The video discusses the impact of Fed expectations and potential trade tensions on Asian currencies, particularly the Korean won and Taiwan dollar. It highlights the improved performance of these currencies due to global trade volume increases and the reflation story. The video also examines the US dollar's short-term strength against funding currencies, influenced by political uncertainty in Europe and US economic indicators. It concludes with a discussion on interest rate hikes, with JP Morgan predicting two hikes this year, and the potential for a supercharged US dollar environment if inflation expectations rise significantly.

What are the two big themes that have dominated market sentiment over the past few quarters?

How have the tensions between the US and certain Asian countries affected trading psychology?

What is the significance of the Korean won and Taiwan dollar's performance since the start of the year?

What are the potential risks to the reflation story mentioned in the text?

What factors could lead to a firmer dollar backdrop in the short term?

How does the spread between the US 2 year and 30 year paper reflect market sentiment about economic growth?

What is JP Morgan's house view regarding the number of rate hikes expected this year?