DOW LOSSES 666 PONTS AFTER GOOD NFP DATA – ASSUMPTION – FED WILL RAISE THE RATES.
The Dow Jones industrial average dropped 665.75 points to close at 25,520.96, capping off the index’s sixth-largest points decline ever. The 30-stock index also fell below 26,000. Friday also marked the first time since June 2016 that the Dow fell at least 500 points. The S&P 500 fell 2.1 percent and finished at 2,762.13, with energy as the worst-performing sector. The Nasdaq composite plunged 1.96 percent to 7,240.95 as a decline in Apple and Alphabet offset a strong gain in Amazon shares. Read More @ https://www.cnbc.com/2018/02/02/us-futures-move-lower-as-investors-worry-about-rising-yields.html
BONDS ARE AT THE BUBBLE – LIKE WHAT ALLAN GREENSPAN SAID.
The US 10-year yield finished the week near 2.85%. Surveys at the end of last year suggested that the median forecast for year-end was 2.9%-3.0%. While many understood that the supply and demand considerations–more of the former and less of the latter (e.g. Fed will buy $420 bln less than in 2017), pointed to higher yields, but the magnitudes may have been underestimated. Also, about a third of the increase in the nominal 10-year yield (15 of 45 bp increase this year) can be accounted for by the increase in inflation expectations. The technical indicators for the March futures contract are extended but have not turned.
UNIMPRESSIVE USD INDEX AFTER A GOOD NFP
USD INDEX STAYS AT $89. We maintain SELL for USD this week.
What are the Technical Charts Saying?
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