Eurozone

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New research confirms that not just gold but also the other precious metals -  silver, platinum and palladium bullion - act as safe havens, especially from 'Economic Policy Uncertainty.' This is something that is particularly prevalent today due to the 'Hard Brexit' impact on the UK and the Eurozone, risk of trade wars and heightened financial and geopolitical risk under the Trump Presidency.

Futures Fall On Rising Trump Uncertainty; Europe Stocks Rise As Euro-Area Inflation Surges

European bonds fell and stocks rose led by banks and retailers as surging inflation data prompted investors to switch into reflationary assets even as speculation about ECB tapering has returned. Asian stocks and US equity futures declined. The Yen and gold advanced after Trump’s firing of the U.S. acting attorney general added to concern over the unpredictability of decisions in the new administration.

Another Greek WTF Showdown Moment Explained

The IMF has once again threatened to pull out of the Troika following a warning that Eurogroup loan measures are not enough for Greek debt. This is one of those WTF moments where statements from Greece, from the IMF, and also the Eurozone make no apparent sense.

ECB Assets Rise Above 36% Of Eurozone GDP; Draghi Now Owns 10.2% Of European Corporate Bonds

As global markets recoil over concerns the Trumpflation trade may be rolling over, the ECB continues to be busy providing the actual levitating power behind near record highs in stocks, and as of the latest update, the ECB's balance sheet rose above €3.72 trillion, equal to over 36% of the entire Eurozone GDP. It also means that Mario Draghi now owns over 10% of the entire European corporate bond market.

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the common currency and the Eurozone itself will not survive the financial and political turmoil already besetting the European monetary union and set to deepen in the coming months and years.

Another Reason Not To Sell Bonds...Yet

"We still think that Mr. Bond will have a soft landing this time. In fact, now that the Inaugural is behind us, with all of its ‘Sound and Fury signifying nothing’, Mr. Market will likely undertake a more cerebral evaluation of the likelihood of 4, 5 and 6% US GDP in 2017... A renewed safe haven bid for Mr. Bond and other fixed income assets seems certain before long, as Real Money and commercials have increased their net longs."

"Everyone's A Genius"

At market tops, it is common to see what I call the ‘high-five effect’ - that is, investors giving high-fives to each other because they are making so much paper money. It is happening now. I am also suspicious when amateurs come out of the woodwork to insult other investors.

Frontrunning: January 26

  • Trump heads to Philly to charm congressional Republicans (Politico)
  • Trump Set to Lay Out Plans for Safe Zones Inside Syria (WSJ)
  • Trump Wants to Build a Wall. Finding Workers Won’t Be Easy (BBG)
  • Sanctuary cities face huge cuts by Trump policy (Reuters)
  • Trump Faces Criticism Over Prospect of Enhanced Interrogation Techniques (WSJ)
  • U.K. Commons to Complete Article 50 Bill Debate in Two Weeks (BBG)

US Futures, Oil Flat As Greenback Rises Despite Mnuchin's "Strong Dollar" Warning

US equity futures were flat, European stocks rose and Asia was mixed after the dollar posted a modest rebound overnight despite Mnuchin's "strong dollar" comments, while oil was flat and gold fell, as investors focused on President Donald Trump’s plans to boost growth. The pound fell after a U.K. court ruled that Parliament must vote on triggering Brexit.