Quarterly Outlook
Upending the global order at blinding speed
John J. Hardy
Global Head of Macro Strategy
Senior Relationship Manager
Summary: Risk Sentiment in full swing but where will we trade Monday?
Good morning,
The first “big” trade deal and hopes for an agreement with China boosts risk sentiment and boosts the “Trump Trade:
Pakistan's armed forces launched "multiple attacks" using drones and other munitions along India's entire western border
China`s trade data surprised over night, Imports had been expected to fall 5.9% but came at -0.2%, exports were 8.1% vs 1.9% expected.
A new pope has been elected, a US American. Leo the 14th is expected to be liberal and work for the underprivileged – maybe an interesting counterpart for the Trump administration.
Today’s agenda is basically empty, news will once again dominate markets, next week the most important events will be the US Inflation and Retail sales data, even if both will not yet include a clear impact from the trade war.
Russia is celebrating the end of World War 2 and there has been speculation that Ukraine may seek to disrupt the parade with Drone attacks in an attempt to embarrass Russia.
We are looking at a massive event risk over the weekend from the Sino-US negotiations in Geneva and the escalation in Kashmir, consider how much risk you want to carry into the weekend. with the Vix relatively low, options as a hedge are an option worth contemplating.
If the talks in Geneva go well and we open the next week above the 200 day averages in the US Indexes and all time highs in the Dax, we could see a further surge in optimism, if they end disappointingly, we could see a selloff, of course the most likely outcome is that nothing spectacular at all happens.