‘As Far As I’m Concerned, It’s Just Speculation’: Full Week Ahead Preview

Monday is Presidents’ Day in the U.S., which means that right now, White House staff are drawing straws to see who gets stuck with the job of telling Donald Trump that this isn’t a new holiday created to honor him, but rather an annual thing.

Between the U.S. holiday and the ongoing Lunar New Year celebrations in Asia, we might be short a bit on liquidity depending on which markets you dabble in, but we won’t be short on narratives to trade.

There’s the Russia probe which, contrary to what Trump’s lawyers have been insisting for months, is apparently not anywhere near winding down. We got a fresh set of indictments on Friday and over the weekend there was more Mueller news as Rick Gates is reportedly set to plead guilty to fraud and according to the LA Times has indicated he’s willing to testify against his former mentor, current co-defendant, and rare rug enthusiast, Paul Manafort. In case you have any questions about whether the collusion story is over or whether Mueller’s investigation has definitively pivoted away from that angle, here are the only two headlines you need:


But don’t worry. “You guys see indictments under your bed at night. Right away you’re ready to LAM it. As far as Trump’s lawyers are concerned, it’s just speculation”..


Trump spent most of Sunday tweeting out egregious nonsense that sounded pretty goddamn guilty to us. He also called Adam Schiff “the leakin’ monster of no control”. This is what about 16 straight hours of insanity/dementia mixed with too much Fox & Friends and KFC gravy looks like:


See this is why we’ve stopped even bothering with dedicating entire posts to these tweets. It’s just an elderly narcissist hypothetically snitching on himself in real-time while regurgitating conspiracy theories he got from Sean Hannity. And in case that needed to be any funnier, he skipped straight from all of that to tweeting about NASCAR without skipping a beat. This fucker is a living, breathing non sequitur…

You’ll recall that the new Mueller indictments seemed to have taken a bit of wind out of stocks’ sails on Friday afternoon:


So you’ll want to keep one eye on the tape for signs of more “Mueller time”.

Additionally, traders will probably fret over tariff headlines after last week’s news that the Commerce Department views aluminum and steel imports as “a threat to national security.”

“We don’t share the assessment that steel imports from Europe, let alone Germany, might threaten U.S. national security,” Brigitte Zypries, Germany’s acting economy minister told Welt am Sonntag over the weekend, adding that Germany views the proposed U.S. tariffs on steel and aluminum as “without foundation.”

For their part, South Korea’s trade ministry has apparently met with local steel makers and is prepared to try and “reach out” to Washington ahead of the implementation of tariffs.

Meanwhile, China’s Ministry of Commerce also weighed in, saying “if [Trump’s] final decision impacts China’s interests, China will certainly take necessary measures to protect its own rights.”

Also this:

Any questions? Here’s what we said on Friday:

Just to be clear, this is going to piss off literally everyone in the G20 and China will of course retaliate (good time to sell some Treasurys!)

Oh, and “the local beer people” aren’t happy:

There are some notables on the data front. We’ll get trade data out of Japan (think: seasonal deficit) on Monday as well as CPI on Friday. Sweden is on deck with inflation data this week as well (Tuesday). There’s probably not a lot of headline risk around the CPI numbers, but you know, in light of recent events they’re notable.

Speaking of inflation jitters, we’ll get the Fed minutes on Wednesday. “We expect the FOMC minutes will show a Fed that has become more comfortable with the idea of inflation heading gradually higher,” BofAML writes, adding that “given the hawkish signal [from the January statement], our economists anticipate a discussion around inflation risks in the minutes that leans toward inflation trending higher.”

“At its January meeting the FOMC added the word ‘further’ to describe expected rate increases,” Goldman notes before telling you what they’re looking for on Wednesday, which is this: “We will look for a discussion of the failure to upgrade the balance of risks, the degree to which participants upgraded their inflation outlook, and potential indications for the rationale to add the word ‘further’ to describe the expected rate increases.”

ECB minutes will be released on Thursday and we’ll get RBA and Riksbank minutes as well.

So the inflation debate isn’t going to die down. How you trade that is up to you (if you’re feeling like everyone was feeling two weeks ago, you’re ready to sell everything and leap off a bridge, but if you’re feeling like everyone was feeling last week, you’re ready to buy it all back and break out the Veuve Clicquot). Cue Uncle Jr. again:

“You guys see inflation under your bed at night. Right away, you’re ready to trade. As far as I’m concerned, it’s just speculation.”

In FX the focus will of course be the yen (again). USDJPY recently broke through 2017 lows and the narrative appears to have changed from one driven by risk-off sentiment to one driven purely by dollar weakness. This against a BoJ where the composition is set to lean even more reflationist than before, so this sets up an amusing standoff between FX markets and policy although again, the story at this point seems to be dollar weakness more than yen strength now that the risk-off mood has faded.

So if you’re looking for reasons to stay cautious, they’re out there. Of course if you’re looking for reasons to try and justify riding last week’s wave in equities, you’ve got that too what with earnings season having turned out exceptionally well in the U.S.

Event calendar via BofAML



3 thoughts on “‘As Far As I’m Concerned, It’s Just Speculation’: Full Week Ahead Preview

  1. OK, now we have a real problem the fu*king Clydesdales are pissed about all this beer sh*t. That is it Donnyboy this ia a bridge too far. The Bud guys are going to shoot every beer can they can find screaming about how this ISN”T how we MAGA goddammit. The HOR-AH of it all.

  2. I wonder how long before other countries start adding the price of digital imports to their trade balance figures and retaliate accordingly. Video and music streaming, cloud hosting, software licences etc. These areas are dominated by US companies.

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