JPY

• Geopolitical vol. Weekend US tariff announcements initially rattled markets. But the USD lost ground as yesterday rolled on. AUD & NZD higher.• US pressure points. US reliant on foreigners to fund its obligations. Reduced capital inflows could weigh on the USD over the medium-term. Global Trends There has been a modest market reaction to the weekend geopolitical news relating to Greenland. Indeed, for some the net swings may be somewhat surprising. For those catching up, over the weekend President Trump announced that eight countries (UK, Denmark, Germany, France, Sweden, Norway, Finland and The Netherlands) would be subject to a...

• Positive tone. Sentiment improved overnight. US equities rebounded. Bond yields rose. Oil fell. AUD ticked up thanks to some relative outperformance.• Data flow. Limited releases today. Next week things pick up with China GDP (Mon), AU jobs (Thurs), PMIs (Fri), BoJ (Fri), & US PCE (Fri) due. Global Trends Geopolitical related headlines generated a few minor bursts of volatility across a couple of asset classes the last few days. However, as our chart below shows, cross-asset volatility remains below average with the headline noise not having a lasting impact. Indeed, this was the case once again with the latest...

• Headline noise. Markets continue to take geopolitical/macro developments in stride. US equities rose overnight. AUD ticked higher.• US Fed. Investigation into Fed Chair Powell raises concerns about central bank independence. US CPI out tonight. US retail sales due later this week.• AU data. Household spending firmer than expected. AU jobs data (22 Jan) & Q4 CPI (28 Jan) important for RBA. A February rate hike is ~30% priced in. Global Trends A few geopolitical and economic crosscurrents such as developments in Venezuela and some US data have generated modest bursts of intermittent volatility over the past few weeks. But...