US economic data continues to be disappointing, Trump and the GOP are trying to do everything at once, and they appear to be putting off tackling fiscal spending and tax reform in favor of wading into the quagmire of health care reform.
US data over the last several weeks have been disappointing, especially when one considers that the economy should have benefited from the holiday season.
Not surprisingly, the US Fed moved to hike interest rates last week, but the markets were somewhat surprised by the hint of three possible rate hikes in 2017.
The outlook for the global economy and commodity markets in general continues to improve, but some might fret over the looming FOMC rate decision, while others might be concerned over the prospect of a firming dollar in the event the Fed does make a move to hike rates.
As we mentioned several weeks ago, the steady rise in interest rates is soon to become an issue for a number of markets.
While the hype and equity market euphoria from the election has started to moderate, a shift in economic sentiment from inside and outside the US was already in motion, and that could allow for a “risk on” vibe until the markets get closer to the mid-December FOMC meeting.
The shocking election results on Tuesday caused a harsh, knee-jerk reaction in many financial and commodity markets.
The march toward a December rate hike continues, with payroll data and wages for October just good enough to increase the prospect of action from the Fed.
We are not sure if the signals being thrown by Treasuries this week are a sign of a longer term change or if we are “putting the cart before the horse.”
A strengthening US dollar and uncertainties in global stock markets have helped to drive some commodity markets lower over the past few weeks, and the possible appearance of a double top in crude oil has many macro-fund traders getting concerned about the outlook ahead.