Morning 1-27

Subdued trading overnight as an Overall theme is lacking. Spoos Steady and Nassy higher, Dax and stoxx 50 a touch lower. Treasuries down bunds up. Dollar a touch higher, Euro unchanged but the yen down 60 pips. Yesterday’s BOJ bond buying program was altered a bit as more focus was placed on the 5-10 year sector as yields were moving too far away from Zero. The amount of JGB purchases were unchanged, that is an important characteristic to remember. None the less more buying in the 10 year sector caused yen to drop and continue to trade lower. All yen crosses are down on the day, EURJPY +70 pips this strength is keeping Euro unchanged vs. Dollar. Today we see first look at US GDP for Q4 a surprise would be a number that misses consensus.
Slow news night but here are a few items of note. UBS reported ugly earnings as clients pulled $15 b from the bank in Q4 this is weighing on all European banks. The banking sector -1.1% and Oil related companies -.7% are leading European stocks lower. Technical picture of Dax and Stoxx 50 is not one that makes believe a rally will be forthcoming. Japanese officials said they are “preparing for all possible US trade contingencies’ also “Japan to monitor impact on its firms from US-Mexico relationships”. A reminder Mexico is One of U.S. largest trade partners if they retaliate in any way it will have an impact on our markets, this isn’t a one way argument. Chatter also about month end activity picking up. A phone call between trump and Putin has been scheduled for Saturday.
Oil lower as failure to trade above yesterday’s highs give pause to the bulls. Nat Gas lower,-110 ticks as No more cold for the rest of winter, I guess. Gold lower for 4th consecutive day as the uptrend has turned into a downtrend.
• Trump and UK PM May press conference scheduled for 12:00
• Next week FOMC, BOJ and BOE
• MSFT beat earnings but Goog and Starbucks missed. American airlines reported huge drop in profit

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