Dec 5, 2024 · 49 min · 11 segments
Geoff and Callum revisit the big themes in 2024 and tally which of their 2023 calls went right. They look ahead to 2025 and beyond and discuss the current market cycle, and where opportunities are in…
Callum ThomasGuestGeoff CastleHostI think last year in particular, we looked at the very strong US dollar trend that had really... and overwhelmed a number of asset classes over the past two or three years.
And we're thinking a reversal of that trend might be something that was in the offing, not to put words in your retrospective mouth, but to summarize what we were talking about last year.
And yet here we are 12 months later, and we're still talking about the king dollar.
And some of those asset classes, which have been under pressure with a strong dollar, are still such.
Yeah, I did have that sort of broad set up, you know, set of charts saying US dollar is looking like it's into a multi-year topping process, a transition from previous bull market to bear market.
And rather than that, you know, I think it was a couple of years ago now that we had that higher for longer term.
And, you know, yeah, I think across the year, the U.S. dollar has rallied across the year.
But if we zoom out to what the U.S. dollar has been doing since 2008, I guess since back until it peaked in 2022, it's really just been this big old range trade.
And I think we're pressuring the upper end of that range at the moment and things are looking quite overbought now.
We did have that brief attempt at breaking to the downside of that trading range.
And meanwhile, we've still got these background conditions of the things still quite overvalued.
So I've got valuation indicators for emerging market currency baskets, developed markets, frontier markets.
They're all more than a standard deviation cheap against the US dollar, or to put it differently, the US dollar is near universally expensive.
I think last year in particular, we looked at the very strong US dollar trend that had really... and overwhelmed a number of asset classes over the past two or three years.
And we're thinking a reversal of that trend might be something that was in the offing, not to put words in your retrospective mouth, but to summarize what we were talking about last year.
And yet here we are 12 months later, and we're still talking about the king dollar.
And some of those asset classes, which have been under pressure with a strong dollar, are still such.
Yeah, I did have that sort of broad set up, you know, set of charts saying US dollar is looking like it's into a multi-year topping process, a transition from previous bull market to bear market.
And rather than that, you know, I think it was a couple of years ago now that we had that higher for longer term.
And, you know, yeah, I think across the year, the U.S. dollar has rallied across the year.
But if we zoom out to what the U.S. dollar has been doing since 2008, I guess since back until it peaked in 2022, it's really just been this big old range trade.
And I think we're pressuring the upper end of that range at the moment and things are looking quite overbought now.
We did have that brief attempt at breaking to the downside of that trading range.
And meanwhile, we've still got these background conditions of the things still quite overvalued.
So I've got valuation indicators for emerging market currency baskets, developed markets, frontier markets.
They're all more than a standard deviation cheap against the US dollar, or to put it differently, the US dollar is near universally expensive.
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