SocGen

Deutsche: The Fed Gave Trump Just Enough Rope To Hang Himself With

"The future is bimodal with volatility to be found between politics vs. policy... Either political bottlenecks clear and the stimulus gets approved and goes full force leading to higher growth potential with structural steepening of the curve, or political tensions effectively sabotage either its arrival or content (or both), and the curve initially bear flattens or even twists with rate shorts capitulation accelerating the rally of the back end."

Why China Unexpectedly Hiked Rates 10 Hours After The Fed

The PBOC stressed that its interbank rate hikes simply followed the market's development, thus are not "true" policy rate hikes. Nevertheless, it also listed four classical rate-hike reasons for the interbank rate changes: the economic recovery, rising inflation (particularly that of housing), strong credit growth and Fed's rate hikes.

It's 1994 Again: Why Albert Edwards Expects An Imminent "Bond Market Bloodbath"

"Accelerated Fed rate hikes will cause tremors in the Treasury bond markets, forcing rates up, most especially in the 2 year – just like 1994. But as yet another central bank-inspired global recession unfolds, I  believe US 10y bond yields will ultimately converge with Japanese and European yields well below zero"

SocGen: "The Average Stock Is Still 26% Down From Their All-Time Highs"

"All would appear to be rosy in the equity market with the consensus promising higher EPS growth in 2017 and bond yields remaining reasonably well behaved despite higher headline rates of inflation and a very slightly more hawkish tone from the US Federal Reserve. However scratch below the surface of these headline numbers and all is not as it seems."  -SocGen

The Week's Key Economic And Financial Events

In this holiday-shortened week, attention will be on the US FOMC minutes, housing data and consumer confidence. There will be GDP, PMI and inflation releases across the Euro Area as well as the latest Greek Eurogroup meeting. Look for GDP and public finances data in the UK.

US Stocks Are Now The Most Over-Priced Since The 2000 Crash

The single most important characteristic of any investment is the price when you buy it. It doesn’t matter how spectacular your investment is. If you overpay for it, you have no margin of safety. And as the market affirmed yesterday, US stock prices can be expressed in a single word: expensive.

Futures, Dollar Slide; European Stocks At 3-Week Lows As "Trump Reality Sets In"

While US stocks closed near session, and all time highs on Friday, the first green close on inauguration day in over 50 years, Monday has seen a modest case of buyer's remorse, with European stocks sliding, Asian shares mixed and U.S. futures lower as the dollar weakened for the 3rd consecutive day to a six-week low, dropping as much as 1% against the Yen, as anxious investors awaited more details of Donald Trump’s policies.