Premium analysis : Big YEN turnaround and GBP reversals

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China abruptly called of trade talks with US. The likelihood of a deal looks bleak and will see further risks of US yield starting to fall toward September lows.

 

In Europe, negative yields are starting to hit home as deposit growth slows and banking industry death spiral has commenced.

The slow dying of banking industry in EU accelerates. Commerzbank said it wanted to shed thousands of staff & close 5th of its branches.

Negative Rates

Negative rates in Europe will do the same level of damage to bank deposit growth as it did to Japan where bank deposit fell dramatically as capital started to chase yields.

 

Dollar Index charts continue to melt up. The dollar uptrend is set to continue next week. The index is in a strong uptrend which can continue upwards as the negative yields in Europe take deeper roots.

However even as Dollar continues to rise higher, a key metric seem to be failing. Corporate America was more optimistic about its future under Obama, when the confidence measure rose 427 basis points during his first two years. During Trump’s first two years, it fell 49 basis points. The lack of confidence in Trump is unprecedented. Generally falling consumer confidence can precede currency weakness.

 

 

A lot of trading charts inside esp on USDJPY and GBPUSD which is set for a crucial week.

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