In a relatively quiet session, which may see US traders sleep in a bit after last night's Superbowl thriller, European and Asian shares rose ahead of Mario Draghi’s testimony at the European Parliament, while US equity futures were fractionally higher (up 0.1% to 2,293) after stocks jumped the most in a week, as traders assessed the trajectory for interest rates while scrutinizing every new Trump tweet.
European stocks rise the first day in four, with Asian stocks, S&P futures and the Dollar all gaining following strong Apple earnings ahead of today's Fed decision and the U.K. parliament's first vote on the Article 50 bill.
While we remain in the purely abstract, theoretical and hypothetical realm of Trump tax reform - there have been no concrete proposals floated yet, with Trump as recently as a week ago slamming the critical border-adjustment tax, only to full reverse himself on it just a few days later - Bank of America has created a useful matrix taking a deep dive into the potential (and we do underline the word potential, because at this rate Trump may spend much of his first year dealing with immigration reform and Obamacare) implications of Trump's tax reform.
Risk assets declined across the globe, with European, Asian shares and S&P 500 futures all falling, while the dollar slumped against most currencies after a news conference by President-elect Donald Trump disappointed investors with limited details of his economic-stimulus plans, and the Trumpflation/reflation trade was said to be unwinding.
Submitted by Charles Hugh-Smith via OfTwoMinds blog,
If we refuse to recognize the high utility value of USD and its global ease of flow, then we will continue to misunderstand the demand for the dollar and its appreciation.