After an eventful trading week last week, global markets are holding onto a positive risk tone. President Trump formally announced steel and aluminum tariffs, but there were exceptions for Canada and Mexico that softened its impact on risk appetites. There has been pushback from Capitol Hill, the business sector and major central banks that could keep trade tensions subdued.
Natural Gas
Reflation Bias Extends into November, Strong Equities Positive for Growth
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Key Market Developments to Pressure Commodity Prices
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US Economic Data Continue to Soften
The good news is that a series of potentially serious geopolitical issues were traversed recently without sustained damage to the global economy or investor sentiment.
Market Sentiment is Colliding with Reality
The markets have reacted strangely to a number of events over the past two weeks.
Global Recovery Fighting a Number of Headwinds
We hope that the Fed isn’t wrong about the recovery continuing, and we hope that the weak US data is a temporary trend and that the US economy is merely taking a pause.
The US Fed Moved to Hike Interest Rates
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.
US Economy Sparking Fears of Preemptive Action from the Fed
With the US payroll report surprising the trade with better than expected results for the month of July, new highs in US equities and anecdotal evidence of a possible bottoming in the Chinese economy (positive Alibaba earnings and a rise in iron ore and copper imports), it would seem like the groundwork has been laid for an improvement in “animal spirits.”
Developing Pattern of Weakness in Energy Pricing Weighing in On Commodities
The early July COT spec and fund net long position reading in 20 non-financial commodities, combined with ongoing strength in the US Dollar and favorable US grain production weather, leaves the path of least resistance in most markets pointing to the downside.
Brexit Injected Volatility into Global Markets
The “unexpected” happened with the UK referendum to leave the EU.