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Morgan Stanley Pinpoints Hedges for Potential Trade Turmoil

  • Strategists recommend bets on volatility, EUR/JPY pair
  • Hedges seen as better than shifting allocation strategy
Updated on

Investors should use hedges to mitigate the effect of several trade-event risks, according to Morgan Stanley.

Trade worries have largely gone into the rear-view mirror this year as stocks have soared and the Federal Reserve turned more dovish. They still can’t be entirely ignored, as U.S.-China talks continue, the approval process for USMCA (the new trade accord between the U.S., Mexico and Canada) gets going and the U.S. contemplates implementing auto tariffs.