Rumors of the Trump trade's demise have been greatly exaggerated.
The new president's November victory set off shock waves in global financial markets, fueling demand for risk-on bets that lifted the dollar and touched off one of the biggest ever post-election rallies in stocks. While a clutch of Trump-fueled trades have taken a breather in the first month of 2017, none have outright reversed and a number of strategies aimed at benefiting from his pro-growth policy promises continue to pay off.
Take a look at an overview of the Trump-led regime shift in global trading. Even with the biggest selloff in U.S. stocks since the election on Monday amid worries of a potentially protectionist agenda, the S&P 500 remained higher by more than 6 percent as of mid-day Monday, a testament to how far equities rallied on speculation Trump's administration would be decidedly pro business.
Here's a roundup of the main financial trades his win prompted and how they're doing:
Reflation bets
Perhaps the most notable feature of the new trading game is the surge in reflation bets. Breakeven inflation rates -- derived from the spread between nominal Treasury yields and Treasury inflation-protected securities -- are climbing to new highs as firming domestic and global data feed market-implied gauges of U.S. inflation. The moves have tapered a bit recently, but there's no sign of a reversal.
King dollar
Greenback bulls have been tamed after the U.S. currency rose to the highest level in more than a decade on the first trading session of the year. The Bloomberg Dollar Spot Index is down 2.8 percent since Jan. 3 as investors await guidance on stimulus plans and mull the impact of Trump's trade policies, after the president dubbed the currency "too strong" in an interview earlier in January.
Peso pop
Few assets have been battered as badly since Trump's election as the Mexican peso, which has fallen almost 12 percent. While the currency has staged a rebound of sorts in the past two weeks, it's still shown itself susceptible to weakness as the administration looks to rewrite trade policy with America's southern neighbor.