As BofA's rates strategist Ralf Preusser writes in a note this morning, "not even a month since the US election and markets seem unrecognizable" adding that the Trump election represented a paradigm shift. Fiscal easing would take over from monetary easing and would allow for the dollar and rates to rise in unison, a trend not seen for a while.
The key economic releases this week are ISM non-manufacturing on Monday and University of Michigan consumer sentiment index on Friday. There are a few scheduled speaking engagements from Fed officials this week.
Away from the US economic calendar, initially focus will be on the Italian referendum result, which already appears to have been largely digested by the market, despite a variety of unknown consequences still to emerge. It will then shift quickly to a critical ECB meeting.
Blink, and you missed the "sell off" from Italy's failed referendum vote.
Submitted by Alasdair Macleod via GoldMoney.com,
The Trump shock produced some unexpected market reactions, partly explained by investors buying into a risk-on argument,equities over bonds and buying dollars by selling other currencies and gold.
Ever since the US adopted a “One China” policy after the 1972 Nixon-Mao meetings, followed by President Carter formally recognizing Beijing as the sole government of China in 1978 leading to the closure of the US embassy in Taipei one year later and cutting off relations with Taiwan, when it comes to US-China diplomacy Washington has maintained a steady posture when it comes to Taiwan: non-recognition.