Global Overview

John WalshGeneral Commentary

Currencies

The dollar is in a corrective mode. Both flat price and relative to the commodity based currencies. The dollar strength has been significant over the last two years. Regardless of the rhetoric the trend is up. Patience however is required.

The euro is showing strength. The trend has been down. The long term scenario for the currency seems rough. Look for a opportunity on this rally. The dollar vs the euro traded at parity briefly. Look for this to happen again in the medium term. Let the short term sort itself out.

 

Energy

 

The crude has come under a nominal amount of pressure. The fundamentals driven by the domestic market remains bearish. The US has shown vast improvement with respect to production. This trend will continue. The crude is always at risk to rallies given the political landscape. The supply however is more than ample.

 

Fixed Income

The bond are in the midst of a rally. The market put a long term high in at 170. The question now is how much of a retracement is at hand. The long term fundamentals of the economy are improving. There are many concerns at present however. Look for opportunities as we move through the year. A less risky way perhaps is to buy the 5 or ten sell the 30. As always the bond really are risky. please quantify the risk reward. The next hurdle to consider perhaps is the tax cut. This will have a impact on the perception of interest rates

 

The French Vote is certainly interesting. The global landscape is changing. The ramifications are very important and offer opportunity if handled properly. The new administrations offer new looks at the market. We are just getting started. The next 4-10 years will shape a much different scenario than witnessed the past 10.

 

Be Well