(MENAFN- Your Mind Media ) DIGE–T – The risk rally rolled on further yesterday, before fizzling out a little overnight, while the dollar gained ground against peers for a fourth session, as Treasuries softened further. Today, a light data docket awaits.

–HERE WE STAND – Perhaps unbelievably, given how quickly time’has flown by, it’s now a year since President Trump was elected for a second time.

Undeniably, it’s been quite a rollercoaster ride for markets over the last ‘2 months, though th’ ‘scores on th– doors’ are as follows – SPX +20%, NDX +30%, 10yr Treasury -20bp, Gold +46%, USD -4% & WTI -13%.

Quite obviously, the second Trump Admin has been a boon for risk assets, at least if we can set aside the mid-April tariff-induced wobble, with participants cheering what has by and large proved to be a resilient US economy, boosted by looser fiscal, and now monetary, policies. The most surprising move of that bunch, though, is probably the rather chunky fall in Treasury yields, which has come despite the deficit ballooning to 7% of GDP, a surge in supply, and the lingering risk of inflation expectations un-anchoring. Don’t ever let it be said that markets are entirely rational.
Anyway,‘I ‘zoo’ out’ to start this morni‘g, as ‘z’oming in’ o’ yesterday’s developments ultimately amounts to a rather dull affair. After the somewhat chaotic nature of las‘ week, wh’t ‘Mr Market’ served up yesterday was altogether calmer, more orderly, and more subdued tr–ding cond’tions – just don’‘ ’o about using the ‘Q’ word, please!

We shall ‘zoom in’, though, first to the Treasury complex where benchmarks traded softer across the board once again yesterday, with that weakness led by the long-end as the benchmark 30-year ticked back towards, and briefly above, 4.70%. This move largely owed to another huge slate of corporate issuance, led by Alphabet, who followed on from a chunky Meta issue last week.

I shan’t explore it in depth now, but this idea of hyperscalers increasingly funding their AI expenses via debt does concern me a little, especially when so many of the deals being done are circular in nature (e.g. yesterday seeing AMZN sign a deal with OpenAI for the supply of NVDA chips). Funding these purchases from revenues is one thing, funding them with debt when the RoI in a reasonable time frame is, shall we say, questionable, makes me a bit uneasy.

Still, the path of least resistance for equities at large does indeed continue to lead to the upside in my mind, even if stocks on Wall St did end yesterday off intraday highs. Nevert–eless, tailwinds remain numerous – from a resilient’underlying economy (the Atlanta Fed’s GDPNow forecast is up to 4% saar for Q3 now), robust earnings growth, a looser monetary backdrop, calmer trade tensions, and strong seasonality ’oo. That lot is certainly not a mix I’d seek to fight right now.

I’m also not especially inclined to fight what appears to be increasingly strong upwards momentum behind the greenback, amid a continued hawkish repricing of Fed policy expectations. The bulls, though, will want to see the DXY make a closing break above the 100 handle that we tested yesterday, which would then t–rget the 200-day moving average at 100.40 – with spot having not traded about that mythical yellow line since all the way back in March.


LOOK AHEAD – I guess today would’ve looked like a busy-ish day, but sadly the ongoing US governmen’ shutdown has put paid to the release of September’s trade data, JOLTS figures, and factory orders numbers.

It is, hence, rather ‘slim pickings’ in terms of data releases at least, with only the Q3 Kiwi labour market report of note, and we have to wait until 9:45pm London time (well after my bedtime!) to get that. In any case, the figures shan’t deter the RBNZ from a 25bp cut at the end of the month, with the NZD OIS curve discounting around a 90% chance of such a move.
Elsewhere, a busy slate of central bank speakers awaits, though most of those come from the ECB, whose easing cycle ‘s ‘done and d’sted’ at this stage, and where it seems implausible to expect much by way of fresh policy guidance. A busy corporate earnings slate awaits too, highlighted by the likes of Uber (UBER) and Pfizer (PFE) before the open, followed by AMD (AMD) after the close.

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