{"id":1845,"date":"2017-02-23T07:07:44","date_gmt":"2017-02-23T13:07:44","guid":{"rendered":"http:\/\/www.ctsfutures.com\/?p=1845"},"modified":"2017-02-23T07:12:12","modified_gmt":"2017-02-23T13:12:12","slug":"morning-thoughts-2017-02-23","status":"publish","type":"post","link":"https:\/\/udg.ehs.mybluehost.me\/morning-thoughts-2017-02-23\/","title":{"rendered":"Morning Thoughts – Feb 23"},"content":{"rendered":"

<\/a>Financials<\/u> –
\nThe FOMC minutes were released yesterday afternoon and they reinforced the overall dovish lean of the Fed despite recent commentary from Chair Yellen & Co.\u00a0 Immediately following the release the dollar weakened and gold bounced.\u00a0 Generally speaking most <\/em>of the comments were everything you\u2019d expect, the typical \u201crate hike fairly soon\u201d sort of thing.\u00a0 However, there were a few headlines that stood out to me.\u00a0 One was \u201cFed officials saw downside risks from further dollar strength<\/em>.\u201d\u00a0 This is the first time in a while we\u2019ve heard the Fed make note of the recent dollar strength and it is interesting to see it come up as the debate over an increased pace of rate hikes picks up.\u00a0 In the past we\u2019ve seen the Fed delay rate hikes due to concerns overseas, and that is essentially what they\u2019re hinting towards here as well.\u00a0 I think this is very interesting.\u00a0 They also mentioned \u201cdownside risk from some potential policies,\u201d<\/em> a clear nod to \u201cuncertainty\u201d surrounding the new administration.<\/p>\n

This does not sound like a FOMC that is keen to raise rates in March, though I should point out that Fed Governor Powell did say yesterday a March rate hike is \u201con the table.\u201d\u00a0 Of course they\u2019d all tell you all<\/u> meetings are \u201con the table,\u201d which we know by now to be a lie.\u00a0 Rate hike odds have dipped since the FOMC statement release, but they weren\u2019t high to begin with at only 38% before the release.\u00a0 June still looks to be your best bet, but who knows what will happen by then?<\/p>\n

Along those lines, markets were clearly influenced by European politics yesterday as the euro bounced mid-morning after it was announced a French presidential candidate was withdrawing and putting his support behind Macron.\u00a0 This lessens the chances of a Le Pen victory in a runoff and French OATS and the euro both rallied in response while gold sold off.\u00a0 This makes it very<\/u> clear we are definitely trading political headlines in Europe right now.\u00a0 I guess we should stop picking on our friends who majored in political science now.<\/p>\n

New Treasury Sec Mnuchin is giving an interview on CNBC this morning at the time of writing.\u00a0 Among interesting comments he said the \u201cmost important thing for growth is the tax plan\u201d and he said \u201ctax reform to be significant.\u201d\u00a0 He said the goal for tax reform is before the August Congressional recess.\u00a0 He said they\u2019re looking very closely at a border adjustment tax.\u00a0 And he interestingly said we will likely have low rates for a \u201clong period\u201d but of course declined to comment on what course of action the Fed might take.<\/p>\n

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