The collision of global markets and social mood

Tuesday, January 3, 2017

Tuesday -- Hot China PMI, Scary HIBOR

S&P E-mini Futures:
Up strongly since Friday's lows.

Markets are loving the latest reflationary China PMI news along with euro zone inflation expectations closing in on the ECB's 2% target.

Markets are choosing to ignore the fact that 3-month HIBOR is back to levels not seen since last January when China's market implosion rocked the world, showing renewed stress between Hong Kong banks.

Source: Zero Hedge

And right on time, the ECB is preparing to scale back the pace of its QE.

CHF and JPY weaker. EUR much weaker since its huge spike days ago, taking all of it back and more.

USD ripping higher.

Prices failing yet again.

WTI crude has popped on yet more favorable news regarding non-OPEC production cuts. Good. It will need all the help it can get if volume and open interest continue to dry up.

NG cratering over 6% due to the same thing: volume and OI cratered.

Meanwhile, from Bloomberg this morning:

Solar Could Beat Coal to Become the Cheapest Power on Earth

Right on the heels of China's renewed interest in the dirty stuff.

Platinum, palladium, and copper ripping. Silver getting into the mood, yet gold sitting it out thus far.

S&P Outlook:
Friday morning's patience yielded benefits. The S&P did indeed probe lower levels, getting down to 2233.62 before signs of life appeared. Today's follow through is welcome.

Would like to see a strong close above 2250.

Stop remains 2213.35, yet getting below Friday's 2233.62 would begin to question the bulls.

Working longs against it.

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