Market Talk- April 24, 2017

Martin Armstrong Armstrong Economics

Donald Trump’s tweet on Saturday for plans of a “big” tax reform announcement on Wednesday has probably been overshadowed by Sundays event. The first round victory for Macron and going head to head with Le Pen certainly propelled Europe, but may be questionable how much of an effect it had away from President Trumps tweet. Much had been credited to the Trump rally this year but complacency started to build so the market is desperate for details. Headlines are going to be key as we approach the 100 days (29th April) and potential US government shutdown. Having seen a 200+ points rally in the first few minutes of cash trading, then the rest of the day was reasonably well behaved. The NASDAQ sets another record while we await further performance for the DOW and S+P to join the party.

Thursday we hear from the ECB when they set monetary policy (no change expected) but the market will be eager to explore discussions surrounding an easing of the extraordinary monetary stimulus program. Interesting price action for GBP which after a failed sympathy rally on the back of the Euro eventually closed sub 1.2800.

2’s closed 1.23% (+5bp), 10’s closed 2.27% (+3bp), Bunds 0.32% (+8bp) closing the US/Germany spread at +195bp (-5bp). France 0.82% (-7bp), Italy 2.17% (-7bp), Greece 6.28% (-18bp), Turkey 10.29% (-8bp), Portugal 3.52% (-19bp) and UK Gilts 1.05% (+2bp).

Author

Martin Armstrong

Armstrong Economics

Armstrong pursued his studies of economics searching for answers behind the cycle of boom and busts that plagued society both in Princeton and in London.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.