Key messages

• The "Trump trade 2.0" has led to a stronger US dollar, higher bond yields, a sell-off in gold, and higher US stocks, particularly benefiting US small cap stocks.
• The main drivers are expectations of lower corporate taxes, deregulation, and higher tariffs on imports, especially from China and Europe.
• There is uncertainty about the actual impact of these policies, as Trump will not take office until 20 January 2025, and the current Biden administration remains in power until then.
• Investment opportunities may lie in US agency bonds, short-term investment-grade corporate bonds, and gold, with a 12-month target of $3,000 an ounce.