Europe

Submitted by Patrick Buchanan via Buchanan.og,

“Don’t Make Any Sudden Moves” is the advice offered to the new president by Richard Haass of the Council on Foreign Relations, which has not traditionally been known as a beer hall of populist beliefs.

Haass meant the president should bring his National Security Council together to anticipate the consequences before tearing up the Iran nuclear deal, moving the U.S. embassy to Jerusalem or shooting down a missile being tested by Kim Jong Un.

When looking at the latest weekly fund flows, it is clear that the Trump trade is over if only for the time being. As BofA reports, citing EPFR data, the last week saw the largest precious metal inflows in 5 months ($1.3bn), the 4th consecutive week of bond inflows ($4.5bn), and a week of modest $1.7bn equity inflows, however US stocks saw $2.5 billion in outflows, representing the 4th weekly outflow in the past 5 weeks.

Some highlights from BofA's Michael Hartnett:

Global shares were mixed, equity futures, the dollar and crude rose as investors focused their attention on today's inauguration of Donald Trump as U.S. president. While the early tone is well bid, some traders anticipate a volatile session, with speculation that a bout of "sell the inauguration" could cap the aging Trump rally, which started with his inauguration.

Donald Trump is right to say America’s NATO allies aren’t paying their fair share. As Bloomberg notes, the alliance expects its members to spend 2% of GDP on defense; but it’s no secret that most of them don’t...

Having reaffirmed his skepticism about the North Atlantic Treaty Organization, and his readiness to make deals with Russia, in European media interviews published last weekend, President Trump leaves European leaders wondering whether they can still rely on the American security umbrella.

There’s a big disconnect for traders. Everyone keeps telling Bloomberg's Richard Breslow that there's so much uncertainty out there that it's too dangerous to trade. They also assume every time we get yet another flailing gyration in a given day’s price action that someone knows something -- and it’s big.

The truth is, no one knows anything at the moment. There are enormous uncertainties on every continent and where the ball stops bouncing is anybody’s guess. And your guess is as good as the next guy’s.