Welcome to 2018 markets!
Over the weekend, Fed’s Williams was upbeat on Trump’s Tax Cuts and eyes 3 hikes in 2018. This week will mark the return of many participants to the markets and by mid Jan we should start to see the first trends of the year take off. We are still in a low volatility/strong growth situation worldwide, which is benefitting carry trades. US equities are strong and still “fairly priced” if we look at P/Es.
USD: Main market movers will be CPI and PPI but this will be a heavy week for Fed speak with all of the emphasis placed upon regional Fed Presidents. The market will be sensitive to additional hawkishness.
EUR: In Europe watch for the ECB minutes and Ger Factory Orders & Ind. Prod.
GBP: industrial production, construction output will be the focal points
AsiaPac: In Australia, retail sales is the main focus. China has a busy week with balance of trade, consumer and producer prices and foreign direct investment.
Going into the week I am bullish on US equities and Crude; I’m also bullish comm-dolls vs. USD and JPY.
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