Tim Price – London Investment Alert (Great Britain) –
There’s an air of unreality in the markets today. They’ve been conditioned over the last decade to salivate over government and central bank stimulus – in the face of the greatest credit bubble ever seen in human history. But now that conditioning is being put to the test. Can the markets really dismiss very real concerns over protectionism, trade tariffs and potentially trade wars, and continue to rise? If not – and markets aren’t able to successfully price both potential good news and bad – are they a safe place to invest your money?
Oil market “backwardation”. Opec’s manipulations of the oil market continue. Now it is trying to achieve “backwardation”: when short-term prices are stronger than long-term ones (the opposite is known as “contango”). The goal is to push prices higher to the immediate benefit of traditional oil producers, without strengthening longer-term prices, which would benefit shale producers bringing longer-term supply back on stream.
First “Super Thursday” of 2017. By the time you read this, Mark Carney will have presented the Bank of England’s latest data and inflation forecasts for 2017. Exactly why these meetings are known as “super” is unclear. Expect a “super” effort to play down inflation and prepare the markets for rates to stay lower, for longer.
New Syrian Constitution drafted… by Russia. In an effort to speed up the peace process between the Syrian government and Syrian rebels, the Russian foreign ministry recently presented the rebels with a new draft constitution. It had been prepared by “Russian specialists” according to Russia’s envoy for Syria, Alexander Lavrentiev.
Brexit means Brexit – for now. Yesterday evening Parliament voted overwhelmingly to give the government the right to trigger Article 50. We’re approaching the end of the prologue. The real story starts when negotiations begin and the markets start trying to price the deal as it takes shape. Volatility is to be expected. If you’re unsure, consider following our Fail-Safe Portfolio.
More Twitter diplomacy. Donald Trump’s inability to hold his tongue – metaphorically – on Twitter continues. This time it involves Australia and a “spat” over refugee numbers. On one level Trump’s brazen ability to question the established order is refreshing. On another, it makes predicting, anticipating and pricing difficult. Donald Trump’s Twitter account is now a market-moving force.