Eurozone

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.

Key Events In The Coming Week: All Eyes On Trump's First Actions

The key economic releases this week are durable goods and GDP on Friday. On the political front, the focus will be is on the first actions of the Trump administration including moves on TPP and NAFTA. There are no scheduled Fed speeches this week.

New President, New World

The old order is passing away. Treaties and alliances dating from the Cold War are ceasing to be relevant and cannot long be sustained. The greater danger for President Trump is that the movement he led will be abandoned, its hopes dashed, and the agenda that Trump rejected and routed will be reimposed by a Republican Establishment and its collaborators in politics and the press.