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The Weekly Track saints

- The Weekly Track - Saints by Bob Savage
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St. Patrick drove the snakes from Ireland, used the shamrock to explain the holy trinity and turned his walking sticks into living trees. For all that we celebrate today and perhaps much of the week ahead. Markets wait for the backstop issue for Brexit to be driven off the Irish Isle in a similar fashion to the snakes. Saints are celebrated for their miracles and that is what we all need to believe in given the global issues from climate change to renewed nationalism to social inequality and declining trust in democratic institutions. The search for saints is underway and the modern version has been found for investors in the guise of central bankers. Next week brings the best of the FOMC Powell patience and that of the Bank of England Carney as they try via a bevy of tools to ratchet up economic confidence amidst the gloom of delays in US/China trade talks and EU/UK separation. Throw in more troubling issues like India/Pakistan missile threats and North Korea returning t
o missile tests and you have a mess of geopolitical concerns. Of course there central bankers at work to offset these fears with supporting roles in the decisions of the SNB, the Indonesian and Russian central banks as well. Delays are normal in the path to sainthood, we all get that, but a sequence of them erodes the miracle they delivered with the new tools of modern monetary theory, pushing markets to reflect on democracy and voters to question their governments. Green protests first with students, than in France are one signal, the lack of consensus in UK Parliament on what to do about leaving the EU or another referendum on the topic are another, while US politics saw Trump use his first Veto as the Senate Republicans pushed back on emerging powers to fund his Wall. Markets were upbeat on hopes that the ECB TLTRO III (affectionately called infinity) mixed with talk of more China stimulus and more US/China trade deal hopes to lift markets from any fears about 1Q growth
weakness. Goldilocks lives with the FOMC Powell pause porridge and the Carney promises to act on Brexit chaos. What happens when markets suspend their belief in the central bankers maybe the question to ask for those inclined to be bearish and doubt future hopes against present pains.