Short on data, short on dollars

After last weeks data headline driven week this one is notable for the lack of data, its also marked by Chinese New Year which generally has the effect of muting markets especially in the commodities sphere.

The result of the inflation laden week last is that the market now believes the rate rises in the USA are likely to slow with 25bps instead of 50bps.

However the ECB’ council member, Knot, suggested that the next two raises in Europe would be 50bps and that rates would not peak until 3.25%.

The Japanese, having thrown a curve ball by widening the band a month ago, left rates unchanged and indeed the notes from the last BOJ meeting indicated that they remain dovish.

All of which have led to higher Euro/ USD and a lower Yen – but the USD is on the back foot presently – all suggested by where the Central Banks are in their rate cycle and unless USA data starts to look more positive then its likely that it will continue to drift lower.

We wait until Thursday for anything meaningful and then durable goods which is expected to show a decent bounceback from last months but again a weak number here will give strength to the notion that rate rises will moderate.

Commodities continued to climb with a suspicion that there was some stockpiling ahead of Chinese New Year although it did feel more like a short squeeze and new investment to me.

Copper continues to lead as the above ground stocks are low and renewables are copper demanding.






January 24





January 25


IFO business climate



January 26


Jobless Claims





Durable Goods



January 27


Pending Home Sales



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