QuiCQ 04/02/2025
Tarrifying!!
"It’s dangerous to be America’s enemy, but fatal to be its friend"
— Henry Kissinger
Enjoying The QuiCQ but not yet signed up for The Quotedian? What are you waiting for?!!
Due to a tight agenda I need to speed this up (even more) today. Ain’t I lucky then that nothing has been going on and there’s little to write about …
Obviously, yesterday’s plat-du-jour was anything tariff, with Trump’s decision to slam trade tariffs on Canada, Mexico and to a smaller extent China starting … today!
This threw markets in upheaval … but just when everybody kind of started accepting the fate of lower stocks and a higher Dollar, the “Art of the Deal” came back into full force and with the US administration kind of getting what they really wanted (i.e. tighter border controls to the South and the North), suddenly both countries under scrutiny got a grace period of another month.
I hope the formidable Marko Papic at BCA Research doesn’t mind me sharing what he shared on Twitter X on Sunday, but it is too good and instructive not to show it to the loyal readership of the QuiCQ:
Swoosh was the sound that markets made as the (Asia/European) intraday trades got unwound in the later stages of the US session …
Wild Waters anyone …
OK, Blitz market recap … stocks, at least in the US and as already allured to, recovered nearly all their early losses. Here’s the S&P mini-futures graph of yesterday, including European trading hours:
The last sell-off of about one percent is likely based on this headline:
The other market of focus was of course the currency market, where the EUR/USD for example dropped all the way to 1.02 on early Monday only to fully recover by session end before softening again:
The following scatter plot shows performance of major currencies versus the US Dollar and the change in implied volatility:
CAD & MXN are two of the very few currencies actually showing a positive return over the first days of February.
In the interest of time, we’ll skip the rates ‘section’ today, but let me show a headline that probably went largely unseen in yesterday’s heat of the battle:
Worth mentioning though is Gold though, which we also highlighted in yesterday’s Quotedian.
The yellow metal has broken out to a new all-time high and has held above ex-resistance, now support for three sessions:
The rally is likely to continue…
Have a great day.
The Indian stock market has been correcting for quite a while now. It may feel like only since December, but the truth is that the market topped out already in December.
Over the past ten year the Nifty has correct ten times in excess of ten percent (I know, ten ten ten). The current correction is actually the second largest in terms of duration (125 days).
Time to buy yet? Not quite. Look for some more evidence of bottom building first.
