“Yet, unfazed by the roll-over in activity and inflation and lower growth expectations, the Fed and the PBOC are sticking to a stubbornly hawkish path. Tighter money at a time of weaker activity poses deflationary risks and a spill-over into the real economy.”
Ok, so it’s Sunday which, as we’re fond of reminding you, means that tomorrow will be Monday – right up until Trump does something that takes the whole of idea of there being a “tomorrow” off the table…
“The reality is that there are many risks on the horizon as we write”…
“It’s so simple”…
“In our opinion, this is not dangerous market complacency but a reflection of an abnormally tranquil macro environment, with a benign economic outlook, very supportive financial conditions, and lower political risks”…
“They don’t have to be governed only by the lowest common denominator. Nor forever ignore the negative externalities of oppressively low global rates and how they further suppress yields and encourage profligate risk-taking.”
“In an age of “radical uncertainty” how long will it be before angry citizens tire of blaming an impotent political system for their ills and turn on the main culprits for their poverty – unelected and virtually unaccountable central bankers?”
It was relatively quiet overnight session which saw market participants continuing to focus squarely on crude, after WTI hit a 10-month low on Wednesday and Brent sunk below $45 for the first time since November. “There is just too much oil in the market,” Fereidun Fesharaki, founder and chairman of energy industry consultant FGE, told…
“In the current environment, we have the opposite situation. Either the economy rolls over (which should be bad for stocks), or it bounces, at which point the Federal Reserve continues on its tightening path (which could also be bad for stocks).”
“Traders need to remind themselves that you can’t win the war if you keep losing one battle after another.”
“Welcome to Japan”…
Markets will get a well-deserved break from scheduled event risks in the days ahead after traversing two consecutive weeks littered with every kind of conceivable land mine, from Comey, to elections in the UK, to a change in forward guidance from the ECB, to a Fed hike that turned out to be hawkish despite an…
Central bank buying has reduced the net amount of securities (in DM) the market needs to absorb, both this year and last, to near zero; we think this has played a critical role in propping up valuations at elevated levels.
Next year looks very different.
“With many risky assets close to the ding-dong highs and central bankers becoming less supportive, it’s hard to argue that conditions are as favorable as they were a few months ago.”
“Anyone who claims to know how this populism, saber-rattling and scandals will play out is fooling you as well as themselves.”
