- Boris Vujcic selected as ECB Vice President
- Canada December CPI 2.4% y/y vs 2.2% expected
- Deutsche Bank sees US dollar risks around the Greenland noise
Markets:
- Gold up $75 to $4669
- Silver up 5% to $94.68
- Bitcoin down 2.3%
- S&P 500 futures down 0.9%
- NZD leads, JPY lags
It was a holiday in the USA and that dampened trading and news to start the week. Eyes remained on the fallout from Trump’s treat to put tariffs on several EU countries if the US isn’t given Greenland. The escalation had stock futures worried but after a drop to -1.2% early in US trading, there was some modest recovery.
There was less of an upturn in the US dollar as the market grows increasingly concerned about the large stockpile of USD holdings in Europe and the potential for a real schism. Some once-unthinkingable outcomes are suddenly within the range of possibilities but we will keep watching for developments, particularly from Congress in the hours ahead.
The lone notable news of the day was Canadian CPI. The headline ran hot while the core numbers were cooler. Within the report there were signs of strengthening in airfares and restaurant prices, both good signs for the Canadian consumer but despite that, the loonie still underperformed its commodity peers. No doubt, the US-Canada trade angst is a part of that. USD/CAD did fall after the data though, hitting a six-day low, something I spoke with Reuters about.
The geopolitical drama is undoubtedly leading to the bid in precious metals with gold touching a fresh record today and silver nearing $95/oz. Bitcoin wasn’t able to join in the trade as risk aversion weighed.
Eyes in the session ahead will be on Japan as the rumored election was called and there is already talk of more spending. Japanese yields continue to rise and the yen couldn’t benefit from broader USD weakness today despite the wave of risk aversion.
This article was written by Adam Button at investinglive.com.