Davo's Dashboard!
Davos is always seen as the show piece of Income inequality of the modern era - the research says: higher the income inequality, higher the stock prices- But Davos ironically has a totally different impact on markets - whenever the rich and mighty gather in Davos and begin to share their "expert views ", it always leads to a sell off - this year is no different -
It’s a matter of fact that this bull market depends on Fed policy, with the rally since autumn riding on the notion cuts are on the way - so all the Fed speakers matter - with Willaims (and others) speaking today, and the release of the Beige Book as well as Retail sales, the day is fully packed.
Rationally speaking, Global pack lacks an organic positive story to trigger sustained dollar weakness. - it's a matter of time that the perennial Dollar bears reassess.
Lagarde speaks today -an interesting topic How to Trust Economics" (?) - Villeroy also.
1.0875, 38.2% of the Oct/Dec rise tested- but just holds- Sustained break targets 1.0793 50% of Oct/Dec rise.
China has turned into a real blackhole and that's starting to have some second-order effects- Chinese Deflation isn't an input but output, and the input stems from the real estate sector translating to broader consumption. They have to sooner or later re visit this new exchange rate regime (the theory says when you shift your exchange rate regime, you are assuming a macro risk despite tonnes of Fx reserves)
Atypical Recession with relatively steady Unemployment- unfathomable but UK shows what's going to transpire across the globe - UK ILO Unemployment steady at 4.2% in three months to Nov. High-impact UK CPI today - consensus sees 3.8% in Dec (a modest downtick from Nov 3.9%). Break below 1.2610 to see downside till 1.2434.
There is no other "safe" trade other than staying Long USDJPY and earning a carry of 5 % with BoJ facilitating your way to being rich- as expected, above 146.10, (50% of 151.92-140.27) momentum strongly on the upside - 148.80/149.05 into focus.
Spent a short span of time below 83.00 - mind you, historically, USDINR invariably records its yearly low in Jan second week. - back into the groove 83.00 83.30.