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2016/07/18 Commentary: Slow Start

July 18, 2016 Rohr-Blog Leave a comment

2016/07/18 Commentary: Slow Start

© 2016 ROHR International, Inc. All International rights reserved.

Extended Trend Assessments reserved for Gold and Platinum Subscribers

COMMENTARY (Non-Video): Monday, July 18, 2016

Slow Start

YAWNsuitSCREEN-160718It seems a slow start to the week after such radical impacts and global events over the past several weeks into last Friday. We had addressed the human and market impact of last Thursday’s awful Bastille Day Nice terror attack in Friday morning’s Terror Trauma? post only to be faced with a Turkish military coup attempt later on in the day. Yet in spite of the extreme human tragedy, the typical lack of a commercial impact from the Nice attack along with the Erdogan government’s defeat of the military coup seems to have left all asset classes in a much quieter ‘steady-a-she-goes’ state this morning.

Possibly this is just a bit of ‘crisis fatigue’ after the serial impacts in the wake of the UK vote to LEAVE the EU four weeks ago. That was indeed a major economic and market impact, even if the shock was timely replaced by the realization the full effects are going to take quite some time to unfold (see our June 30th Advantage FTSE post for more.) Possibly sad but true that the markets have also treated quite a few other ‘social’ events as less than market-decisive. Yet there are also a lack of economic releases today. On top of that the US general election political conventions begin this week with the Republicans in Cleveland.

So possibly today is seeing a bit of circumspection in the face of whatever trade, defense and security pronouncements come from presumptive Republican nominee Trump and his minions. Those have previously been fairly radical. Will they say anything that upsets the markets, or take a more subdued stance? We shall see. Yet in any event, there is also quite a bit more important regular economic data and central bank influence into the balance of this week. While there are quite a few other indications along the way, those culminate in Thursday’s ECB rate decision and press conference followed by Friday’s global Advance PMI’s.

For all of the rest we refer you back to Friday’s discussion of the Nice attack and its typical lack of market implications, which also contains quite a few updated indications for the key markets. The balance of the full market indications are in last Thursday’s review of the Bank of England’s ‘no action’, with the full Market Observations update in last Wednesday’s Accommodation Fest Rolls On still consistent with current conditions.   

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.

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Rohr Market Research Tagged 2007, 2007 redux, 2016, Abenomics, Advance, analysis, Asia, Australia, bias, BoE, BoJ, bond, Brexit, Bund, China, comments, confluence, convention, CPI, crude, Crude Oil, currency, DAX, debt, Deflation, Disinflation, dollar, dovish, Draghi, ECB, economic, Empire, employment, equities, Euro, Europe, exports, Fed, fixed income, FOMC, Foreign Exchange, FTSE, GDP, Germany, Gilt, govvies, hawkish, IMF, imports, Indicators, inflation, instability, interest, interest rate, Japan, LEAVE, macro, macro-technical, Manufacturing, Michigan, MPC, NFP, Nice, NIKKEI, NIRP, normalcy, normalcy bias, normalize, OECD, oil, PMI, Pound, QE, RBA, redux, Republican, Retail, risk-off, risk-on, S&P 500, Sentiment, Services, T-note, technical, terror, Trade, TREND, UK, US dollar, Yellen, Yellen put, Yen

2016/07/15 Commentary: Terror Trauma?

July 15, 2016 Rohr-Blog Leave a comment

2016/07/15 Commentary: Terror Trauma?

© 2016 ROHR International, Inc. All International rights reserved.

Extended Trend Assessments reserved for Gold and Platinum Subscribers

COMMENTARY (Non-Video): Friday, July 15, 2016

Terror Trauma?

NICEterrorAFTERMATH-160715We are really depressed to say it, but this is an edit of content we have published too many times previous. Since the January 2015 Paris attack on satirical journal Charlie Hebdo we have occasionally (yet certainly too often) had to offer our sympathy and support to the victims of terrorist attacks and their families and friends. Nice is yet another horrific situation that seems so unjustified by anything the people who were attacked had anything to do with in their lives. The further tragedy is the ineffectual official response. The typical statements from the leaders of France and the rest of the developed world ring hollow in the face of their limited action.

Days of mourning and commitments to limited further military action are Band Aids on a much bigger wound. While France has always been more dedicated to identifying the problem and countering efforts of the terrorists, the current incident demonstrates one thing very clearly: Surveil and Prevent will not work. The radicalized individuals either as disaffected natives or those with almost unimpeded access to Europe through open borders policies has undercut any chance the manpower and technologies capable of monitoring so much activity is even possible.

America

And as we noted after last November’s Paris attacks, America is the worst offender. The weakness of President Obama on this issue has only encouraged the radicals rather than elicit the ‘friendlier’ response he had hoped. His lack of desire to actually identify the problem as Islamic Radicalism leaves them inspired to feel America cannot even focus, much less respond effectively. As the leader of the ‘free world’ he has failed miserably to grasp the practical implications of his geopolitical policies from almost his very first day in office. Don’t take our word for it. Just look around.

Market Response

Yet markets, and especially equities, have been remarkably subdued in their response to the current horror in Nice; just as they were regarding Paris. How could this possibly be? Let’s allow once again that this was a horrific human tragedy. The loss of innocent life due to the fanaticism of a group of radicalized people always seems so senseless. Yet, in the intermediate term human tragedies do not tend to be equity market tragedies as well.

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.

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Rohr Market Research Tagged 2007, 2007 redux, 2016, Abenomics, analysis, Asia, Australia, bias, BoE, BoJ, bond, Brexit, Bund, China, comments, confluence, CPI, crude, Crude Oil, currency, DAX, debt, Deflation, Disinflation, dollar, dovish, Draghi, ECB, economic, Empire, employment, equities, Euro, Europe, exports, Fed, fixed income, FOMC, Foreign Exchange, FTSE, GDP, Germany, Gilt, govvies, hawkish, IMF, imports, Indicators, inflation, instability, interest, interest rate, Japan, LEAVE, macro, macro-technical, Manufacturing, Michigan, MPC, NFP, Nice, NIKKEI, NIRP, normalcy, normalcy bias, normalize, OECD, oil, PMI, Pound, QE, RBA, redux, Retail, risk-off, risk-on, S&P 500, Sentiment, Services, T-note, technical, terror, Trade, TREND, UK, US dollar, Yellen, Yellen put, Yen

2016/07/14 Commentary: BoE Shocker?

July 14, 2016 Rohr-Blog Leave a comment

2016/07/14 Commentary: BoE Shocker?

© 2016 ROHR International, Inc. All International rights reserved.

Extended Trend Assessments reserved for Gold and Platinum Subscribers

COMMENTARY (Non-Video): Thursday, July 14, 2016

BoE Shocker?

BoEpicFACADEwHORSE-160714After Wednesday’s Accommodation Fest Rolls On we are pleasantly surprised to find the Bank of England Monetary Policy Committee managed to hold rates steady at the 0.50% all-time low, and not expand its purchased assets beyond the previous £350 billion. It is a triumph of sane assessment of real conditions over the highly anticipatory policy making. The latter has been the case for the US Federal Reserve. It has led to a significant weakening of the Fed’s standing in the wake serial retractions of overly upbeat economic outlooks and hawkish interest rate views. In fact, the degree to which the BoE wants to see the actual impact of the June 23rd UK vote to exit the European Union is refreshingly circumspect.

It is also consistent with our analysis in our June 30th Advantage FTSE post. As we noted at that time, “…UK-EU agreements will continue for now… and into the intermediate term future. In that regard the support of the Bank of England and competitive advantage from weakness of the British pound will indeed be an edge that would not otherwise have been achieved…” And “…the clock ticking on the full evolution of the UK… relationship with the EU might once again weigh on British industry and the FTSE. Yet for now, as the markets have shown, it is indeed… …Advantage FTSE.”

In today’s MPC statement (our marked-up version) the Bank has reinforced the degree to which there will be an impact across time that will likely be less positive for the UK economy. Yet it is important to note that in the tradeoff between future inflation based on a weaker pound and slower economic growth due to less investment in the UK, the BoE is firmly on the side of supporting the economy. In fact, through a process almost half of all UK residents would have preferred to avoid, the weaker pound may allow the Bank of England to succeed in moving the inflation rate back towards its 2.00% target.

This is clearly articulated in the fourth paragraph of today’s statement. Yet it also notes that it is only a delay in assessing the steps that will be necessary, and likely provided once they complete their review for the August Inflation Report (Thursday the 4th.) That will of course also include announcement of interest rate or asset purchase decisions. And in the statement’s penultimate paragraph today it clearly notes it is happy to combine higher inflation with “…whatever action is needed to support growth…” In spite of the challenges Brexit represents for the Bank of England, there are likely many folks at the BoJ, ECB and many other central banks who must be very envious right now.

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.

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Rohr Market Research Tagged 2007, 2007 redux, 2016, Abenomics, analysis, Asia, Australia, bias, BoE, BoJ, bond, Brexit, Bund, China, comments, confluence, crude, Crude Oil, currency, DAX, debt, Deflation, Disinflation, dollar, dovish, Draghi, durable, ECB, economic, employment, equities, Euro, Europe, exports, Fed, fixed income, FOMC, Foreign Exchange, FTSE, GDP, Germany, Gilt, govvies, hawkish, IMF, imports, Indicators, inflation, instability, interest, interest rate, Japan, LEAVE, macro, macro-technical, Manufacturing, MPC, NFP, NIKKEI, NIRP, normalcy, normalcy bias, normalize, OECD, oil, PMI, Pound, QE, RBA, redux, Retail, risk-off, risk-on, S&P 500, Services, T-note, technical, Trade, TREND, UK, US dollar, Yellen, Yellen put, Yen

2016/07/13 Commentary: Accommodation Fest Rolls On

July 13, 2016 Rohr-Blog Leave a comment

2016/07/13 Commentary: Accommodation Fest Rolls On

© 2016 ROHR International, Inc. All International rights reserved.

Extended Trend Assessments reserved for Gold and Platinum Subscribers

COMMENTARY (Non-Video): Wednesday, July 13, 2016

Accommodation Fest Rolls On

Goldilocks-160304After Sunday’s Commentary: S&P 500 Update the September S&P 500 future fulfilled the bullish potential by setting the new all-time futures high seen on Tuesday. That was anticipated from the technical strength into the end of last week on the back of recovery of the US Employment report’s June Nonfarm Payrolls (NFP) number from a very weak May figure, it pushed back above key resistance. Yet there are those times when a strong NFP can weigh on US equities, if there is a chance it might encourage Fed tightening. However, no such potential existing at present due to the unsettled nature of the rest of the world left a ‘Goldilocks’ (not too hot, not too cold) psychology in place. With improved US data and little chance of a near term Fed rate hike, what else could the US equities do but rally?

The further encouragement this week came from Japanese Prime Minister Shinzo Abe’s party achieving a great victory over the weekend in Upper House elections. That gave him the latitude to announce a fresh extension of Japan’s already massive stimulus. This was a fillip for both the Asian and even European markets. The latter were also assisted by noises from the European Union on allowing more state recapitalization of struggling Italian banks than had previously been considered allowable. Of course, this is then a policy that can be inferred for the banks of any EU country.

As far as direct central bank action, it was not expected that the Bank of Canada would cut its base rate from 0.50% this morning. Yet Governor Poloz and Senior Deputy Governor Wilkins will hold the post-rate decision press conference at 11:15 EDT (10:15 CDT, 15:15 GMT.) That may provide some further insight on how the BoC is leaning.

Yet the far more telling central bank announcement this week is Thursday’s Bank of England interest rate decision and statement. And at least so far, that is indeed just a statement. Given the speculation that the BoE might cut the base rate from the current all-time low 0.50%, this seems a bit odd. However, as the Fed has noted on many occasions, it they decide to move the rate at a non-press conference scheduled meeting, they can always convene an impromptu one. Mitigating the idea there will indeed be a rate cut at Thursday’s BoE meeting are Governor Carney’s post-Brexit statements on there being a range of steps the Bank can take outside of lower rates. We shall see.

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.

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Rohr Market Research Tagged 2007, 2007 redux, 2016, Abenomics, analysis, Asia, Australia, bias, BoE, BoJ, bond, Brexit, Bund, China, comments, confluence, crude, Crude Oil, currency, DAX, debt, Deflation, Disinflation, dollar, dovish, Draghi, durable, ECB, economic, employment, equities, Euro, Europe, exports, Fed, fixed income, FOMC, Foreign Exchange, FTSE, GDP, Germany, Gilt, govvies, hawkish, IMF, imports, Indicators, inflation, instability, interest, interest rate, Japan, LEAVE, macro, macro-technical, Manufacturing, NFP, NIKKEI, NIRP, normalcy, normalcy bias, normalize, OECD, oil, PMI, Pound, QE, RBA, redux, Retail, risk-off, risk-on, S&P 500, Services, T-note, technical, Trade, TREND, UK, US dollar, Yellen, Yellen put, Yen

2016/07/10 Commentary: S&P 500 Update

July 11, 2016 Rohr-Blog Leave a comment

2016/07/10 Commentary: S&P 500 Update

© 2016 ROHR International, Inc. All International rights reserved.

Extended Trend Assessments reserved for Gold and Platinum Subscribers

COMMENTARY (Non-Video): Sunday, July 10, 2016

S&P 500 Update

CHURNcolorful-150521Why just the September S&P 500 future after Friday’s Commentary: US Jobs Explosion? Simply because the Evolutionary Trend View of all other markets is significantly the same as Friday’s analysis in the full Market Observations (in the lower Extended Trend Assessment in that post.) It is in fact that the continued outperformance of the US equities that have caught our attention, and leads to the question of why this should be so extreme? Is it real confidence the US economy is that strong, or are there other influences at work? There is a good case for why the latter is likely causing the extended strength in the US equities, and that will be explored below.

In the meantime, the other global market tendencies fully reviewed in Friday’s Market Observations are worth a very brief review. That will establish just how much of an outlier the US equities have become. The other major developed economy equities remain the same as previous. FTSE has extended its push above the previously stubborn 6,250 resistance to slightly above the 6,500-50 next significant resistance with the mid-6,700 area above that. However, that relatively stronger performance could be at least in part some equalization of its weakness against the DAX earlier this year.

The extended discussion of why the FTSE is exhibiting relative strength can still be accessed in our June 30th Advantage FTSE post. In essence, aggressive weakness of the British pound while the existing UK-EU trade agreements will remain in place for some time explains a lot about the temporary (even if intermediate term) advantage being ceded to the UK economy and internationally oriented equities. Since the June 23rd Brexit vote the previous strong sister DAX has reversed roles into the weaker index. While clawing its way back above the 9,500-50 congestion, it has been nowhere back near the pre-Brexit push above its prominent 10,000-10,100 congestion.

That is also important because 10,000-10,100 had been the pre-Brexit equivalent to FTSE’s 6,250-6,300, at which it previously struggled compared to the DAX temporary swings well above 10,000-10,100. So it is a very significant role reversal right after all of the dire predictions for the UK economy and markets if the LEAVE camp should succeed. And the NIKKEI remains the real weak sister, barely clawing its was back above its 15,300 area early Friday. That said, it is likely that it will improve a bit further early Monday to make up ground after the upside leadership of US equities with Europe grudgingly in tow.

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.

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Rohr Market Research Tagged 2007, 2007 redux, 2016, analysis, Asia, Australia, bias, BoE, BoJ, bond, Brexit, Bund, China, comments, confluence, crude, Crude Oil, currency, DAX, debt, Deflation, Disinflation, dollar, dovish, Draghi, durable, ECB, economic, employment, equities, Euro, Europe, exports, Fed, fixed income, FOMC, Foreign Exchange, FTSE, GDP, Germany, Gilt, govvies, hawkish, IMF, imports, Indicators, Industrial, inflation, instability, interest, interest rate, Japan, LEAVE, macro, macro-technical, Manufacturing, NFP, NIKKEI, NIRP, normalcy, normalcy bias, normalize, OECD, oil, PMI, Pound, production, Productivity, QE, RBA, redux, Retail, risk-off, risk-on, S&P 500, Services, T-note, technical, Trade, TREND, UK, US dollar, Yellen, Yellen put, Yen
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