The near-record string of 10 consecutive Dow Industrials record highs, a streak not seen since early 1987, may be about to end if futures, which are currently trading -0.3% lower, fail to stage a rebound.
Submitted by John Rubino via DollarCollapse.com,
Every few years, it seems, one or another mismanaged eurozone country falls into one or another kind of crisis. This leads to speculation about the end of the common currency, which in turn spooks the global financial markets. Then the ECB conjures another trillion euros out of thin air, buys up and/or guarantees all the offending country’s bonds, and calm returns for a while.
Two weeks ago, German finance minister Wolfgang Schauble confirmed Donald Trump's charge that the Euro is far "too low" for Germany, but said he is unable to do anything about it and instead blamed Mario Draghi. “The euro exchange rate is, strictly speaking, too low for the German economy’s competitive position,” he told Tagesspiegel on February 5. “When ECB chief Mario Draghi embarked on the expansive monetary policy, I told him he would drive up Germany’s export surplus . . . I promised then not to publicly criticise this [policy] course.
While typically uneventful, this morning the release of minutes from the ECB's January 18-19 meeting prompted a spike in both French and Spanish bonds, with yields dropping between 6 and 8 bps after the ECB said that “limited and temporary deviations” from the capital key “were possible and inevitable.” As Bloomberg explains, the gains in these countries are due to their larger overall outstanding debt, as deviations from capital key suggests the ECB may end up buying a more bonds from these countries.
Specifically, this is what the ECB stated::
The dollar rebounded from a key 200-DMA support level, strengthening against all major peers, pushing S&P futures higher as European shares rose, led by basic resources and real estate, while Asian stocks fall. Gold fell from its highest level since November as demand for some haven assets ebbed while global bonds declined. Oil dipped, pressured by a stronger dollar.