Week In Review – June 15


  • Friday’s markets were surprisingly resilient given the escalation of the trade wars
  • Big recovery in Euro periphery sovereign spreads on the back of Italian FinMin’s statement backing the euro currency
  • Angela Merkel is having big problems within her government. Some speculate here days are numbered.  Watch this space
  • Turmoil in EM financial markets continues. Turkey 10-year up 117 bps on the week, Brazil up 45 bps
  • 2-10’s yield curve continues to flatten in the U.S.
  • Junk spreads tighter on the week with CCC in big
  • The relentless hammering of the Argentine peso continues. A move this large is not sustainable unless the country is monetizing.  Take a look at the chart below; the monetary base is growing 30 percent on an annual basis.  Argentina does not have the luxury of being a reserve currency.  In order to stabilize the peso, the central bank must tighten up base money growth.
  • EM currencies weak across the board as monetary screws in the S. continue to tighten
  • The dollar index hit significant resistance in low 95’s. An interesting chart is forming.  Is it a head and shoulders bottom forming or just a pause before the breakout?
  • Euro stock markets outperformed last week, led by Italy
  • Tech continues to outpace other sectors in the U.S. stock market
  • Natural gas had a decent week
  • Oil continues to correct in front of this week’s OPEC meeting



Jan16_Argentina Money Base







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