EUR 22.06 For Business Accounts Only

The Weekly Track gravity-hill

- The Weekly Track – Gravity Hill by Bob Savage
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Markets are on gravity hill, a place where the layout of the road ahead produces optical illusions, so that a car in neutral appears to be rolling uphill against gravity. Without a horizon, it becomes difficult to judge the slope of a surface, as a reliable reference is missing. This is what we hear from the FOMC as global uncertainty overwhelms the present condition. We have been in this spot for most of 2019, where the global crush of 4Q pain has been ignored, where the patient Fed shift to neutral in January lifted risk markets back from the dark valleys of December 2018. But the horizon is shifting again and the car has stopped moving. The fear of US politics getting uglier as Mueller delivers his Russia report, of global growth reversing after German manufacturing PMI drops to 6 ½ year lows, Brexit confusions rise with a big protest in London and as the US yield curve inverts 3M to 10Y – all that unwinds the risk rally that started after the January FOMC meeting. M
ix politics with economics, shake with an extended global rally extended by too much credit and you have the makings for a larger roll down the hill moment even with policy plans in neutral.