Happy Friday from Copenhagen!

We’ve had a great week in the markets as our Trump base-case came to fruition. However, we are beginning to observe some signs of exhaustion in certain “Macro Plays” related to Trump in both the FX and Fixed Income spaces. Meanwhile, the relative picture for US equities continues to shape up positively, especially when compared to markets in China and Germany.

Turning to China, this morning’s briefing was more rhetoric than substance. Officials finally admitted that the much-discussed 6 trillion yuan debt package is actually a debt swap rather than new stimulus. While local governments will be allowed to exchange debt held in Local Government Financing Vehicles (LGFVs) for national debt, which is marginally positive news, it does not inject fresh liquidity into a system that is clearly in need of stimulus.

It is also worth noting that this debt swap addresses only 10% of the outstanding debt in these off-balance-sheet LGFVs, which falls short of being perceived as the “Bazooka” that many had anticipated.

Chart 1: China’s debt swap visualized