Price revulsion for risk continues following a cold weekend. Moods are wretched with the hope for central bankers to fix the financial conditions back to hot from freezing very much in doubt ahead of a long week of economic and political events, says Bob Savage Monday.
Today was about risk-aversion extending with U.S./China trade relations in doubt as China calls the U.S. ambassador to lodge a formal complaint regarding the Huawei CFO arrest. This continues with the European markets waiting for the Brexit vote tomorrow – now potentially in limbo - and the ongoing French yellow vest crisis bringing another weekend of mayhem.
Politics in the U.S. and Europe are easily priced by markets as voters make clear the direction and extent of change while in more autocratic places like China, these risks are opaque and leave open doubts.
The China trade report over the weekend is an example where significant weakness in imports maybe a flashing red light for Xi and his policy approaches.
Markets are grasping for anything good today, and coming up short, even in the UK where delaying the Brexit vote may be just making for more British pound (GBP) pain.
The mood overall is wretched like the charts for most any risk asset.
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