tfe_weeklyobservations-201116-1

Summary – November 8 to 20

• US Presidential Election November 8, 2016
• Stocks have stormed to record levels
• The rise in rates is very dangerous in equities as whole, not just in some sectors
• Traders interpreted President Elect Trump’s spending promises as economic growth and inflation booster, thus bond prices decreased with higher yields
• Janet Yellen’s latest speech make certain a rate hike in December, but Trump’s fiscal policy created an uncertainty regarding the Fed’s monetary policy in 2017
• The BoJ intention to keep interest rates near 0% by rising the gap between long-term and short-term interest rates.
• US core inflation decreased by 0.1% to 2.1%, Fed still waiting for the PCE index at the end of the month. Demand for the housing market increased.

Summary – November 21

• Oil jumps to 3 week high as Putin freeze comments
• Dollar rally shows signs of fatigue
• Global Stocks mostly higher
• Fed rate hike odds approach 100%
• ECB President Draghi speech: Bank solvency improved, the profitability is still challenging for banks. Todays’ low interest rate environment is necessary for a return to higher rates in the future. Structural reforms and more growth friendly fiscal policies should be implemented to boost the growth.
• Commodity – A brief story of gold (price) digging – An Elephant with a golden Trump