The Trump inflection Changes today: Add NKY long, 10Y real rate short and CNH put, close forward Kospi vol and Food & Beverage short. We are not making mass changes today. While some of our trades have worked better than others post-election we are broadly happy with the balance. We still want exposure to growth and to own yield where we can but also want to protect ourselves from a further surge in the USD and rates. We diversify our equity long in EM and European yield with a long Nikkei position. It is not the best entry point but we suspect it has further to run on a one year horizon. A stronger USD is good for Japanese equities where it is not for EM, so they complement one another. We add a short US 10Y real rate trade too to protect against rising US yields, as breakevens have already moved significantly. We close our Kospi vol trade (changed view from strategists) and drop the short Food leg of our Pharma/Food trade, reflecting the sharp sell-off in the long duration sectors of late. Summary: Still be long growth and yield but hedge with USD and Rates Year aheads are notoriously tricky to write and almost always wrong. Anyone who wanted to correctly predict the outcomes and how markets would react to them in 2016 did not need so much as crystal ball as a time machine. As investors and strategists we have to make calculations as to the most likely outcomes, where is the best upside to play them and how best to hedge the risks around them. Donald Trump’s election is in our view an inflection point for global markets, starting new trends in some asset classes and extending trends in others. It does not completely change the world though, as the disinflationary and weak growth pressures that have plagued the world since the GFC are structural rather than cyclical. But the shift to fiscal and populism is likely to boost growth and inflation, so it does change the picture to a significant degree. If we are to call it an earthquake it is perhaps a five rather than