Weekly Assessments

Week ending Friday 17th February 2017 It was another good weak for equities. The rally has legs. It seems to have little to do with monetary policy directly as bond yields and the USD were both flat over the week. The equity rally that won’t die: building up expectations ever higher There was a continued

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Respectable but low nominal growth forever unless positive monetary reform

Week ending Friday 10th February 2017 A quiet weak until Trump promised a “phenomenal” tax package. Stocks rose a good 0.5%. Stocks rose again on Friday led by financials as the scourge of the banks at the Fed, Governor Tarullo announced he was stepping down in April. He was the unofficial governor responsible for financial

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FOMC, waning confidence, and weak wage growth push back rate rise expectations

Week ending Friday 3rd February 2017 We have argued that it is quite likely there will be just one rate rise in 2017, right at the back of the year just like in 2015 and 2016. Events this week did nothing to shake that view. The FOMC was less hawkish than feared, surveys appeared to

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Market Monetary indicators going positive: will it scare the (current) Fed?

Week ending Friday 27th January 2017 For once it was better to arrive than travel. The sideways moves in markets since the first flush of the Trump rally was broken as equities in particular hit new highs following the inauguration. Perhaps some had thought that the “travel and arrive” adage would give them an opportunity

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Battle lines beginning to be drawn up: Trump versus the (current) Fed

Week ending Friday 20th January 2017 An old adage in financial markets is that it is better to travel than to arrive. The post-election, pre-inauguration rally was modestly impressive. The S&P500 is up around 6% in six months. Most of the rally in equities was very early on, a short-covering overshoot immediately after the election

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First Trump Press Conference generates heat but no light

Week ending Friday 13h January 2017 A very flat week across equities and bonds, but the USD did drop 1% as some of the momentum appeared to slow from Trumponomics during and in the aftermath of the first official Trump press conference since winning the election. Just noise from Trump meets the press Little of

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Reality crept away for a bit, at least for equities

Week ending Friday 6th January 2017 A nice 1.7% recovery for equities, as the S&P 500 rose 1.7% in the week, got the New Year off to a bang. According to many experts, the data was positive all through the week. We beg to differ. We saw nothing that significantly beat expectations in the surveys

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Week ending Friday 30th December 2016 The ramifications of the Fed rate rise and associated modest hiking of the rate path projections continued to be felt around markets over the last two weeks. Asset prices were flat during the pre-Xmas week but presaged drops in equities, bond yields and the USD this last week. The

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It felt good but Fed is not going to accommodate it

Week ending Friday 16th December 2016 Fed not going to war on Trump’s fiscal plans but firing a warning shot for now Last week we said that markets clearly feel good about Trump but asked whether the Fed would keep relaxed. The answer is, no. The Fed raised rates and sent a small warning shot

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It feels good but will it keep the Fed relaxed too?

Week ending Friday 9th December 2016 It feels good Maybe this is what the markets look like in a recovery in nominal growth expectations? Bond yields had already moved up along the curve but especially at the longer end so the curve steepens. Last week we got a little bit more of the same with

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