EUR 9.24 For Business Accounts Only

The Morning Track alternative-facts

- The Morning Track - Alternative Facts by Bob Savage
http://track.com/articles/the-morning-track-alternative-facts/

Politics continue to trump economics. We have finally reached the pinnacle of cynicism as the press in the US and world reports on the 2.5 million or more women protestors to Trump, that the crowds at the Trump inauguration were less than in Obama’s and that Trump’s address Saturday to the CIA highlighted his support for the intelligence community with the claim - “Trust me. I’m like a smart person.” I didn’t hear much about the US pulling back from TPP or planning to renegotiate NAFTA – both reported by the White House and both far more important to how to invest in 2017. Trump counselor Kellyanne Conway coined a new term – “alternative facts” to explain the Trump Press Secretary false claims that the crowds at the inauguration were – “the largest ever.” T-Shirts have already been made to fight such alternatives and that maybe how it will be for the next 4 years. In France, the Socialists back extremist Hamon (36%) over former PM Valls (31%) –
going further to the left as they struggle for relevance between moderate-right Fillon and far-right Le Pen and their respective parties. So it goes in democracy where opposition has taken on its on reality. Some facts don’t matter and some do, some political spins work and others don’t, this is the world we live in yet for most investors “mood” matters more than “facts” until they become too big to ignore. Until we have clarity on tax reform, deregulation and fiscal stimulus for infrastructure, doubters will remain. We aren’t in a recession or a boom but stuck with 2% average growth and have been so for years – perhaps this all changes in the next few months but 4Q GDP this Friday will be an unavoidable fact – one that sets the tone. With no other real facts to trade on, the Asian markets didn’t buy “America First” and sold USD and equities. US bonds rallied from 2.45% to 2.42% adding to the dollar woes. Many want more details about tax reform, d
eregulation and infrastructure spending before buying further into the Trump world. This mood changed a bit in Europe but even with bonds unchanged, USD and equities remain weaker. The GBP has a role to play in USD weakness today with the Sterling up despite tomorrow’s Article 50 ruling from the Supreme Court. The upcoming US auctions of debt and the interest from Japan and Asia is another driving force for the USD – with JPY looking at a “double bottom” at 112.60 for resistance, and many expecting more of a rate enticement for buying the buck.