2017/08/13 WEEKEND: NOKO Crisis Redux
© 2017 ROHR International, Inc. All International rights reserved.
Extended Trend Assessments reserved for Gold and Platinum Subscribers
WEEKEND: August 13, 2017
NOKO Crisis Redux
Market responses to the US-North Korea (NOKO) confrontation have run a bit farther than we might have originally expected, yet not in any way changing overall trends. There will be more below on US equities overrunning initial support, yet with much heavier up trend support remaining at lower levels. In terms of the potential for the NOKO crisis to reach a truly tragic end on a human and commercial and financial level, there is a very good question on why a US dollar that was already recovering from its extended selloff is not only not exhibited any sort of a ‘haven’ bid; it has reverted to weakness. Possibly the answer is the same as the extended bid in the govvies: reversion to weak US inflation data last week.
This fits right in with the Fed’s recent more sanguine federal funds rate increase language, with a shift to concentrating on reduction of its Brobdingnagian balance sheet as the right way to ease back on accommodation. [For much more see our July 27th Commentary: Balance Sheet Chicanery post.) That lack of any imminent Fed rate hike weighs on the US dollar, underpins equities and allows govvies to continue a month-long rally.
Yet before we return to that and the still open wound that is the Greek Debt bailout funding conundrum next week, any orderly continuation of the projected market trends requires a less than belligerent end to the NOKO confrontation. On current form, hostile statements of both Kim Jong-un and President Trump seem to leave that a marginal possibility. [More background in last Wednesday’s North Korean Crisis? Or What? post.]
Yet there is cause for hope if the US (a super power facing a much smaller and otherwise defective North Korea) can mute its rhetoric, and rely on quietly confident statements that reflect a steady, strong stance. The fly in that particular ointment is the degree to which the US President would need to tone down provocative statements on potential future US actions. A geopolitically savvy friend said last week that maybe we can hope for a miracle, where Mr. Kim comes to his senses. I responded by saying that might not be necessary if President Trump can revert to limited, more subtle communications that merely reconfirm America’s commitment to act. And my friend’s visceral response? “Well, that isn’t going to happen.” And yet, under geopolitical ‘war games’ alternatives…
Authorized Silver and Sterling Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion. Non-subscribers click the top menu Subscription Echelons & Fees tab to review your options. Authorized Gold and Platinum Subscribers click ‘Read more…’ (below) to also access the Extended Trend Assessment as well.
2017/08/16 Commentary: Back to the Fed
2017/08/16 Commentary: Back to the Fed
© 2017 ROHR International, Inc. All International rights reserved.
Extended Trend Assessments reserved for Gold and Platinum Subscribers
Commentary: August 16, 2017
Back to the Fed
US Secretary of Defense Mattis warning that if North Korea fired on US territory it would be "game on" was very explicit. This is part of why we felt the ‘NOKO first strike scenario’ was not a likely outcome (see our WEEKEND: NOKO Crisis Redux post for more on that and alternative scenarios.) Yet that holds the prospect of heating up again as the US and South Korea head toward annual major military exercises from the top of next week.
And speaking of major influences that may become more critical next week, there is also the annual Kansas City Federal Reserve annual Economic Policy Symposium in Jackson Hole, Wyoming. Key among the various communications will be European Central Bank President Mario Draghi’s speech next week Friday (August 25th.) Yet the current spin on that is he will NOT suggest any policy shifts. This will be consistent with the overwrought inferences on removal of accommodation at his late June speech in Sinha, Portugal being reversed in all subsequent ECB communication.
And in any event we will need to deal with another central bank influence first: today’s 13:00 CDT (14:00 EDT; 19:00 GMT) release of FOMC July 25-26 Meeting Minutes. There is anticipation of much discussion of why any further federal funds rate increases are less than warranted or desirable at present. Yet there will also be keen interest in any discussion of the planned reductions in the Fed’s balance sheet, with potential to impact especially both equities and govvies with some influence on foreign exchange.
Authorized Subscribers click ‘Read more…’ (below) to access balance of the discussion. Non-subscribers click the top menu Subscription Echelons & Fees tab to review options. As this is a ‘macro’ assessment, Market Observations remain the same as last weekend’s WEEKEND: NOKO Crisis Redux post that were updated (lower section) after Monday’s Close, and there is no Extended Trend Assessment in this post.
Read more...