DXY was stable on Friday night:
The Australian dollar fell a bit:
Oil and gold both look pink:
The metals are gone for the races:
The miners were firm:
Emerging equities too:
Junk was good:
Offer of treasury bills:
Inventories fell again:
The virus is still history. In Europe, it is now on the decline, but several weeks of lockdown remain:
In the United States, we have months of tightening ahead as cases continue to spread in an overly open economy and deaths begin the terrible catching-up:
Plus, the fast approach is a tax cliff of immense proportions, from BofA:
• Many pandemic assistance programs in the CARES Act will expire at the end of the year without congressional intervention.
• The expiration of federal unemployment insurance programs – PUA and PEUC – alone could be a drag of 1.5 pp in 1Q. Removing the other provisions will create additional headwinds.
• We expect Congress to pass another $ 500-1 billion package early in the first quarter, which should offset the drag and support growth in the second quarter.
Some graphics. The cliff:
Just as the recovery in employment stops:
And more need the salary:
Let’s also cut other things:
The impact will be significant:
But, of course, it comes after:
I am always looking for short term market weakness to get longer value and cyclicals for the rally thereafter.
The same dynamic applies to the Australian dollar.
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