Well, well, well. The Bank of England's Mark Carney talks about easing monetary policy over the summer due to deteriorating economic conditions. Down goes the British pound. Up goes the FTSE 100. Up go US equities taking US Treasury prices with them. Everyone loves easy money. Right? That speech did spark an upside move for the US dollar index, and the Japanese yen. That's not so good, is it?
Already seeing a tremendous devaluation in their currency, the BOE talks up easing its policy. Let that sink in. They haven't seen economic hardship yet due to the Brexit fallout. All of the buyers and sellers that create a market for goods and services are still in place. Fundamentally, wouldn't you give your already dramatically weaker currency a chance before pouring kerosene on the fire?
Does this now mean that Janet Yellen, Mario Draghi, and Haruhiko Kuroda line up and do the wave? Currency war. Oh, did anyone see the news out of the PBOC today? Don't forget that James Bullard, the most volatile and least responsible voting member of the FOMC, speaks this afternoon.
Let's check on today's winners, and losers
1) S&P 500 (^GSPC) resistance is currently at 2084, which seems to have held on the first attempt made by the index. If this level cracks, we look at 2093 to the upside. On the way down, there is some traffic at 2078 and 2072.
2) All 10 sectors are in the green this morning being led by staples for obvious reasons. As a sector, Health Care is bring up the rear, while the transports struggle as a group.
3) Still no real profit taking for gold. Is it possible that it won't come. It really depends on how folks read central banking intentions. WTI crude may be off 2%, but the energy sector has again uncoupled from its primary underlying commodity.
4) We still should see a re-balancing of asset classes tonight, though some of those moves have obviously already happened—and recent moves in the equity space will have made some moves less necessary.