Thread by @kevinmuir

Tonight's tweet storm is all about FX, Trump, and vol

Remember back to Sep 2017? Back then Trump still hadn't figured out he had the power to administer unilateral tariffs on countries. The world was stuck on this idea that Trump's power was actually limited by office

1/ of 6

But in a @Jkylebass interview by @RaoulGMI on @realvision, Kyle wisely pointed out that Trump, under the Trade Act of 1974, had the power to unilaterally impose tariffs up to 15% at any time.

Kyle joked that he was pretty sure Trump didn't know that.

2/ of 6

Well, Trump figured it out, and since then he has been running around calling himself "Tariff Man" and basically imposing tariffs on any country that strikes his fancy.

At first it didn't seem so bad, but we have quickly learned it's not that much fun.

3/ of 6

After getting his way on trade, Trump has recently taken to bullying Powell into doing his bidding. By and large, the Fed has succumbed.

But there is one economic input that Trump has complained about, but has not quite figured out how to fix (yet).

4/ of 6

And that is the US dollar. Although Trump has tweeted that it is not fair that the US dollar rises, he has yet to realize that he has the authority to do something about it (he controls the treasury).

And when he figures it out, only one trade you want on the sheets...

5/ of 6

And that is FX volatility.

Right now the JP Morgan FX Volatility Index is sitting near all-time lows.

FX vol is dirt cheap. Regardless of your views of the US dollar, buying gamma in FX-land is probably the best long vol position out there right now.

6/ of 6