Morning 1-31

After yesterday’s Dovish Fed, meeting the probability for a RATE CUT in December is 13% January 2020 23%. Gold trading at 9 month, working 4th consecutive monthly gain highs helped by the weaker dollar/ dovish fed. U.S. Indices NDX, SPX, and Russell roughly at 6-week highs. Per Mizuho “As of 5PM ET yesterday, 180 S&P 500 companies have now reported 4Q18 results. 72% beating EPS ests on +17.7% growth. 62% topping sales ests on +5.9% growth. “

 Out of the Eurozone GDP in line with expectations but German retail sales missed badly, continuing the run of below consensus economic releases for EZ largest economy. A narrow range in Euro trading little changed, Bunds a bit higher and European Stock markets mixed. Crude oil trying to break out to upside currently trading at 2-month highs as Lower OPEC production finally pushing prices higher. Yesterday’s EIA oil data showed the least amount of Saudi Arabian oil imports to the USA in months. Natural gas little changed to higher. Copper trading at 6-week highs as the Less fed rate lifting all “risky assets”

Event risk for today is the U.S. / China trade talks, President Trump already out with a few tweets “China’s top trade negotiators are in the U.S. meeting with our representatives. Meetings are going well with good intent and spirit on both sides. China does not want an increase in Tariffs and feels they will do much better if they make a deal.” In addition, “No final deal will be made until my friend President Xi, and I, meet in the near future to discuss and agree on some of the long standing and more difficult points. Very comprehensive transaction” Slim possibility anything definitive to come from these meetings but if a trade deal was announced it would give a nice boost to risk

 Chinese markets closed all next week

Today’s Calendar

  • 7:30 Q4 employment cost index
  • 8:45  Chicago PMI
  • 9:00 new Home sales

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