Market update: Longest winning streak in history for global stocks, Romania raising rates, Oprah for president

9 Jan

by Mihály Tatár


Good Morning!


  • The stock market rally continued, maybe a bit less enthusiastically (SPX +0.17%, DAX +0.36%, Nikkei +0.56%, Shanghai +0.44%) in absence of fresh developments – to get a feel of where we are now, the S&P is approaching 400 days without a 5% correction and the MSCI World Index is having its longest winning streak in history without a 5% correction. In currencies, everyone-is-long EURUSD positions were grilled (1.1950), and Romania unexpectedly raised interest rates from 1.75% to 2% – that is a first in a decade and the second in the region after the Czech Republic – a step to avoid ’an overheating economy with accelerated inflation’. (In a strong contrast, the Hungarian Central Bank is still in active easing mode, to the point that the Hungarian 10Y yield just fell to 1.92%, a fresh record low. The Romanian development also partially helped the Forint and the Zloty to weaken – EURHUF 309 and EURPLN 4.172.) In a somewhat funny turn of events, the European media talked up Theresa May’s big government reshuffle in advance – her position is much stronger now, you know – only to see the relatively undangerous process collapse when several senior ministers went off script and refused her orders (one stayed after a long argument and one refused the new job). That said, the GBP is gradually strengthening (GBPUSD 1.36) on the notion that May is so weak against the EU that the Brexit end result will look like if nothing had happened (and in case the May-government collapses, anything can happen, like another referendum). Interestingly, Nigel Farage, the leader of the UK Indepedence Party, recently met Michel Barnier, the EU’s Chief negotiator, summarizing the talks as ’the EU still doesn’t get why the UK is leaving – when I suggested to him that it might be something to do with open-door immigration, he almost looked at me with incredulity’. Farage added that in his impression, the Brexit  trade deal on goods looks quite easy to do  –  with services, especially financial services, being still the point where the EU wants to show its toughness and expects major concessions from the UK.


  • Counter-terrorism analysts all took notes yesterday after it was revealed that on the 6th of January, a fleet of 13 drones were used to attack Russia’s military bases in Syria, carrying explosives and using GPS guidance to fly in the night. The attack was successfully dealt with – Russians combined counter-electronic-warfare systems (overpowering radio signals) and Pantsir anti-aircraft missiles to bring them down – but it is hard to avoid the conclusion that these types of attacks can from now on happen any time, anywhere.


  • As a further sign of the state of the US Left, the media now excitedly debates the possibility of Oprah Winfrey running for presidency in 2020 (!), with the objective-as-usual television networks like CNN and NBC already endorsing the unconfirmed plan.  Whether you support the idea of Oprah running the US is of course a world view question, but even the editorial comments show that the Democrats didn’t really learn anything from 2016 (my favorite: ’she even avoided men bashing at her Golden Globe speech, sounding presidential’).


Have a nice day,



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