A review of 2018 ..... and it's only Jan 16th

Tuesday 16th January 2018 ref :- "Bond sell-off and soaring euro take centre stage" , The Financial Times , Markets and Investing Well, not so much a review .... more a quick resume of the dominant themes for investors so far in 2018 -- or three of them at any rate (themes that is, not investors). With immaculate timing, it so happens that two of the themes identified by the FT are taking a bit of a breather this morning (euro strength, bond weakness). No matter .... both have been highlighted as early trends for the new year and nothing moves entirely in straight lines, as we know. Euro gains momentum There was a bit of "to-ing and fro-ing" in early January, and the failure of the euro to

A little fear is no bad thing .....

ref :- "Watch the bond market, not equities" , Comment by Gillian Tett in the Financial Times. On Wednesday we brought up the question of whether a significant rise in bond yields might cut the legs from under the stock market, as Jeff Gundlach believes it will in the second half of this year. It was a long-held if slightly simplistic market adage that rates of interest and equity prices generally move inversely, and in truth in broad terms it was an accurate one. Not now though ...... the Fed has raised rates five times in the current cycle, and thinks it most likely that it will do another three times this year. Under the old rules that would be seriously bad news for equities, and yet in

Tightening ? In Japan ? You're having a laugh, surely ...... ? ref :- "US Treasuries lead

On the run again today but just quickly ..... we've landed on the FT's round-up but all this morning's reviews lead with yesterday's actions by the Bank of Japan that not entirely surprisingly look to have caught the markets slightly unawares. Of all the world's central banks, by whatever measure you care to use the biggest user of Quantitative Easing (QE) has been not the US Federal Reserve, not the European Central Bank and certainly not the little old Lady of Threadneedle Street (aka the Bank of England, of course). It's been the Bank of Japan, which has been fighting deflation and attempting to prompt some reliably positive inflation readings for .... well, decades. There was something o

Is that a trend I see ? Not yet, it ain't ...... ref :- "Dollar shows resilience in battle

We all know how profitable it can be for investors to spot a trend forming, to get on board early and ride it to rich returns. Depending on how long the trend lasts, you can play with profits (the market's money, as they say) to maximise rewards and you don't run the risk of getting in late and at the top of the move. Remember 2017, when a big majority entered the New Year as dollar bulls and confident that the Trumpflation effect would continue to give the US unit another leg to its long rally ? The opposite happened almost from Day One, and the sharpest of the wrong-footed dollar bulls were those who were quickest to recognise the new dynamic and reverse their positions. And so it is that

"That's what makes a market" .....It's all about opposing views, of course. ref :

Ever get fed up with the Brexit thing ? At the risk of appearing thoroughly unprofessional, we have to confess that we sometimes feel a bit that way. In particular, since the jury is still out on the matter the "Brexit Blues" theme can get a little wearing. Even while maintaining total impartiality on the subject (of course), it's possible to wonder if one day some of the major news organs and opinion-shapers will look back and question whether their coverage has entirely evenhanded. Ardent Brexiteers argue that many of these opinion-shapers, the liberal elite in their ivory towers they might say, are no closer to getting the point about the majority Brexit vote than they were 18 months or s

Some would say that the biggest post-New Year headache arrives tomorrow ..... ref :- "No Idea

According to Wikipedia, the most likely origin of the old proverb "The road to hell is paved with good intentions" is an observation by the French abbot St Bernard of Clairvaux. Since the old boy was doing his thing in the early-to-middle part of the 12th Century, it's unlikely that he had MIFID 2 in mind at the time. Nobody can really doubt that the authors of this massive piece of EU financial regulation that comes into play tomorrow were driven by the best of motives. But if its implementation proves to be less than a fully-fledged decent into hell, huge question marks still hang over its costs, the markets' preparedness for its arrival and its ultimate ability to achieve its ambitions. M

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