Hedge funds position for Trump 2.0
Hedge funds bet on strong dollar continuing
EM stocks dumped ahead of Trump inauguration Goldman note

LONDON, Reuters Hedge funds have positioned for Donald Trump39;s U.S. presidency with their highest levels of borrowing since 2010, while betting the dollar would continue to rise, according to bank research and industry data.

U.S. stock trading hedge funds kicked off the week with gross leverage levels in their highest range since 2010, a note from Morgan Stanley39;s prime brokerage seen by Reuters showed. Gross leverage reflects how much a hedge fund has increased its market positioning.

European stock traders wagered that European equities would rise, especially in financial, tech and energy companies, said the note.

Lower taxes, deregulation and higher tariffs might create tailwinds for some U.S. stocks, but tariffs and added volatility would deter gains more widely, said an investment letter by James Hanbury and Jamie Grimston, portfolio managers of the two funds at Lancaster Investment Management in London overseeing roughly 1.4 billion in assets.

This will be going on whilst the U.S. fiscal deficit is at greater than 6 with the economy currently at full employment, said the letter.

Higher volatility and lower regulation should be beneficial for Plus500 and IG Group where we have a smaller holding, it added, referring to financial firms in which the hedge fund held long positions.

AMERICA FIRST

Trump kicked off his…