Weekly Assessments

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Week ending Friday 19th May 2017 A mixed week in terms of economic news led the equity markets to end up nearly where they started, but politics made a big splash that was mostly dissipated. Underlying economic trends trump politics, it seems. The USD has maintained its recent run of weakness, undoubtedly helping equities too.

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Week ending Friday 12th May 2017 Monday’s relief rally #2 on the establishment in France winning over LePen lasted about a week. All it took was a bit of dull data from US inflation and US retail sales to see US bond yields back to where they were at the start, or even lower. They

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The “Dudley put” in operation

Week ending Friday 28th April 2017 A relief rally from fears of a tail risk result in the French election plus some good tech earnings led to a 1.% jump early in the week for US equities. There were no implications from or to monetary policy. The US equity rally was also supported by the

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Week ending Friday 21st April 2017 A super quiet week in US markets with most asset classes shuffling sideways in a tight range. The oil price gapped down twice falling 7% over the week as mounting US production coincided with (unsurprising to us) mounting scepticism over the powers of OPEC to enforce production cuts. Surveys

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Change Trump gives way to Status Quo Trump

Week ending Friday 14th April 2017 If “Change Trump” caused a surge in optimism amongst business folk and consumers, what will a move to “Status Quo Trump” cause? The numerous flip-flops on policy gained momentum during the week just as the 10yr-2r bond spread shrunk dramatically down to 103bps, and in a “bad” way, i.e.

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Dudley in charge

Week ending Friday 7th April 2017 A quiet week in equities with mostly decent economic news perhaps capped by NY Fed President Dudley’s confirmation that the Fed would begin to shrink the Fed’s balance sheet, even if tempered by a “little pause” in rate rises. The USD behaved as though Dudley meant to be tough

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Chickens survive as foxes keep away

Week ending Friday 31st March 2017 No follow through in markets from Fed tightening and rumoured Fed discontent with positive market reaction. In fact, the absence of any follow through from the Fed was the “news”. Sure, some of the usual suspects at the regional Feds made the usual hawkish comments, but Yellen said nothing

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Week ending Friday 24th March 2017 This week we got the first whiff of panic in markets if political or economic news is bad. Bad news is really bad for markets as the Fed is signalling a much tougher monetary stance. By the end of the week, the bears remained in charge despite the bulls

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A game of chicken: The Fed lost

Week ending Friday 17th March 2017 Last week we called it a “A Game of Chicken”. We wondered who would blink first. Well, we know now. The Fed blinked. Having cranked up expectations for tightening two weeks previously they did the bare minimum. Just 25bps rate rise, but no change to projections, disposal of Fed

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