In a "strange move", China cut the RRR for its five biggest banks by 1% to 16%, temporarily lowering the amount of money that they must hold as reserves to relieve pressure in its financial system as demand for cash surges ahead of the Lunar New Year holiday.
European and Asian shares, and S&P futures slipped, while government bond yields jumped to multi-week highs on Thursday after Yellen's hawkish speech. Oil rose after API reported a drop in crude inventories. The euro rebounded as investors look to Mario Draghi to address rising European inflation that make the ECB's stimulative policies look increasingly out of sync.
The week ahead will be a busy one, with a plethora of events including the Davos shindig, where particular focus will be on Chinese President Xi Jinping, the first Chinese president to attend. China will also announce GDP on Friday, which also marks the inauguration of Donald Trump as the 45th US president. Tuesday brings Theresa May's long-awaited Brexit speech.
"The opinions of experts concerning the future are accorded great weight . . . but they’re still just opinions. While I take a dim view of forecasts, and especially of opinions presented as facts, I do believe there are such things as facts. Unfortunately, however, the concept of 'facts' is among the casualties of the increasingly partisan environment. Recently we have seen both the elevation in status of 'non-facts', as well as the tearing down of 'real facts'."
On January 12 the Clinton Foundation's Veronika Shiroka advised the DOL that as part of a "Plant Layoff" it would layoff 22 workers on April 15, with reason for the dislocation stated as "Discontinuation of the Clinton Global Initiative."
Good news for globe-trotting Americans: most countries around the world are free or very cheap to get in to. But, as this map from HowMuch.net shows, some countries do charge through the nose for a visa. And it's not the ones you would expect.
"If we’re in one of those periods now, if 2016 is like 1932 or 1979 - then you not only have to change your portfolio, you have to change your lifestyle. That’s one of the things we’ve been telling clients. If this is a major shift to populism, nationalism, greater state involvement, and less globalism, then you really have to rethink almost everything in your life."
Global stocks were fractionally lower in early European trading, closed Asia mixed, while S&P futures were unchanged, as the dollar fell for a second day on concerns ahead of Trump's press conference on Wednesday. Oil rebounded after its Monday plunge, while commodity metals like iron ore rose limit up in Chinese trading.
The US will offer to sell some 8 million barrels from the petroleum reserve. According to the notice of sale, the Energy Department is accepting bids on sweet crude oil until 2pm CT Jan. 17. The contracts will then awarded by the end of January, with early deliveries expected in February and other deliveries in March, April.
There are reasons to believe that 2017 will be the year when tensions in the Old Continent are reduced. The Russian Foreign Ministry has just confirmed this view in a statement. But Poland seems to be marching out of step.The JASSM-ER deal is a highly provocative step towards Russia undermining the security of Europe and positioning Poland at the frontline of the arms race.
While Russia continues to mostly mock and ridicule, and generally take in good humor the constant allegations by the Obama administration that it "hacked the election", China's reaction to a similar accusation has demonstrated far less sense of humor.
"I don’t think the Russians believed for a minute that Trump could really be elected. They were convinced that U.S. elites would ensure that one of their own would win. They were amazed, even aghast, at what happened."
Both countries would lose in a full-blown trade war, but it is the United States that has the upper hand. Trump understands this, which is why he is pushing China to get a better deal for America. If China also understands it’s in a weaker position, it will be able to avoid a lose-lose scenario.