Written Commentary
Wkly Futures Market Summary For 2.10.2025
February 10, 2025
Busier day for data, digesting RBA minutes, Korea Exports, UK PSNB, focus on array of business and consumer confidence surveys in Europe, Canada Retail Sales; US 20-yr auction and earnings from General Mills
Turkish Lira spectacular roller coaster an extreme proxy for lack of market depth and illiquidity; Erdogan stunt engineers desired short squeeze, but changes none of the bad underlying fundamentals
EVENTS PREVIEW
There is a much busier schedule of data today, though the focus will primarily be on the numerous Consumer Confidence surveys in Europe, which will shed some light on the impact of the surging infection rates, with Germany’s GfK survey sliding sharply, though ‘only’ to a 6-month low. Otherwise there are the South Korea Dec-2021 trade data, UK Lloyds Business Barometer and PSNB to digest, with only Canadian and Polish Retail Sales along with US Q3 Current Account ahead. The events schedule is very light with the unsurprising RBA minutes to digest, and the array of concerns around the Omicron variant, and related imposition of activity restrictions, along with China’s property sector woes, Fed policy tightening and a host of domestic and geopolitical tensions will again likely reduce scheduled data and events to little more than ‘walk on’ roles. How illiquid and momentum driven are markets at the moment, and how much spikey volatility? Well as much as the example may seem extreme, the spectacular rebound overnight after an equally spectacular fall in the Turkish Lira has to be posted as exhibit A, and those dismissing it as a unique situation may find themselves in the same sinking boat as in 2008, when markets melted down following Lehman’s collapse, and one unfortunate commentator made the foolish oxymoron quip that ‘we have had two days of one in 3 trillion year events’. The ‘anti-dollarization’ move by Erdogan & co. has successfully engendered a massive short squeeze, but it does not resolve any of Turkey’s economic problems: woefully poor govt economic policy, large short-term external debt, insufficient FX reserves, chronic vulnerability to oil price rises, and above all incessant heavy handed political interference in monetary policy.
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ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
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