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Economic Indicators Released Overnight
Investors breathed a sigh of relief as US PCE data came in as expected, and prompted a short covering rally into what has been a disastrous week for risk assets.
World Equity Markets
The press conference with Zelensky at the White House was a train wreck. There are many short versions, like below, that overestimates the arguing and you do need to see the whole thing to get proper context. But the message is clear and everyone gets it
The world has been pulled from the abyss of global recession & WW3 by Trump. The euphoria of hope is, however, beginning to wear thin and the paper profits are getting eroded.
This is why there is a certain unease in the air
Now the greatest coup, peace in Ukraine, looks untenable in it's current form. And the US had to beg Putin to collaborate.
Inside the arcane world of precious metals trading, something is blowing up systemically, and the massive price run in Gold in the last 12 months tells us the the US dollar's purchasing power has collapsed, along with that of the other fiat currencies.
As risk assets got smashed this week, an unease is now pervading the world. Or at least investors, to start with.
Canada races to revive Commonwealth ties with its U.S. relationship on shaky ground [CBC]
Stocks Slump On Trade War Fears After Trump Pushes Ahead With Tariffs [Bloomberg]
China Rejects Trump and Putin's Proposal [Newsweek]
Gold, Gold, Gold and more Gold. Conspiracy theories abound.
Here's what we don't know
Everything else in noise.
And if you want to know, the price of Gold went down this week
GOLD / USD Daily
A hammer on the daily chart with those long wicks suggest at least short term support above 80,000. Spot ETF came in at 48,000 so would see significant selling below.
Trump's memecoin put a top on the market but what's worrying me is the leverage from Saylor's company (and others). Markets always know the path of most pain.
BITCOIN / USD Daily
Can't hide this stuff for much longer.
Economic Releases in US
Weak consumer confidence and higher than expected jobless claims pushed the stock markets lower, exaggerated by tariffs.
Only the short squeeze on Friday saved the NASDAQ from breaking lower.
NASDAQ daily
And the 10 year yield continues downwards
US 10 Year Government Bond Yield
Economic Releases in Canada
The spotlight is very clearly right on Canada
The economy is slow but wage inflation is high. But that's only going to get worse
And the Bank of Canada Governor isn't sugarcoating it.
Tiff Macklem warns on the looming impacts of tariffs
Ontario’s mortgage delinquency rate nearly doubled in the final months of 2024 [CTV News]
Home builders warn of ‘brutal blow’ to housing sector from steel, aluminum tariffs [CTV News]
Economic Releases in China
Not much to report economically but at last the banking system reform has started with the recapitalisation of some major banks. It's a start but it's way too late.
China’s undersea cable cutting in Taiwan and military manoeuvres between Austalia and New Zealand have kept the focus away from the economy.
And the public is being encouraged to put their savings in Gold.
Trump Jolts China Markets as Tariff Wake-Up Call Punctures Rally [Bloomberg]
China’s Repo Market Hit Hard as Yuan Defense Sparks Cash Squeeze [Bloomberg]
China’s Steel Sector Seized by Talk of ‘Supply Reform 2.0’ [Bloomberg]
China CPI will decline moderately in February, says PBOC advisor [ForexLive]
Economic Releases in Japan
Japan is happy to stay out of the limelight this week, as the sensitivity of interest rates and currency value play out.
Underpinning the problems for Japan are the collapsing birth rate and an ageing population.
Being the most indebted nation as a function of GDP (250% plus) and that GDP capped by these constraints, leaves very few options for the Japanese Govt and Central Bank. Especially when they don't have a plan.
Economic Releases in EU
Low growth, stubborn inflation.
A week after Trump called the EU's bluff and the worst case result didn't happen at the german elections, not much has come out of the EU, ECB. BUBA lost a load of money for the first time was about it.
Europe is friendless as Starmer was, I must admit, better than expected in the press call with Trump. Unbelievably, especially to the EU, the UK is their only hope at this minute and that hope looks to be fading
Economic Releases in UK
A curiously empty week, statistics wise. Maybe there was a lorry parked in the way to the press room!
Cable looking to move upwards is a good sign.
In fact the UK is in a very good place at the moment, even if we don't recognise the opportunity just yet.
What's not to like !!
GBP / USD Daily
After chiding US allies, Donald Trump lavishes praise on ‘special’ Keir Starmer [FT]
Economic Releases in Australia
The Monthly CPI indicator was the only piece of news this week working looking at, and it came in slightly lower than expected.
The rate cut has brought out all the property buyers again which is actually a bad thing. If Australia needs rates to be cut, that can't drive the economic divide even wider.
The Aussie dollar isn't helping the call for cuts either.
AUD / USD Daily
Australia is definitely feeling the tariffs unease as Trump talks about aluminium / steel imports / minerals / taxing US tech companies.
The Australian highly regulated banking system needs to be deregulated (it won't happen) to get a free trade agreement. Remember Larry Fink talking 30 year fixed mortgages in Australia recently?
The spotlight will be on Australia very soon, and the currency is the escape valve.
Why the RBA rate cut is a very big deal [AFR]
Government spending highest since World War II [AFR]
More of the same I guess. Nonfarm payroll on Friday to confirm the recession fears.
Risk off.