American traders are off today, and it would be easier on them if they were the only ones trading US products (like Canada, for example).
Unfortunately, the entire world is trading and selling US products even when traditional markets are closed. That’s what it is to represent the global reserve currency.
After this weekend’s renewed Trump-induced volatility, US assets are falling off a cliff, and for not unjustified reasons.
The US President repeated his threats to purchase Greenland for national security, prompting EU leaders to plan an emergency meeting outside the freshly began Davos World Economic Forum (WEF).
Threats include not only additional 10% tariffs on major EU partners (including Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland), but also a significant compromise to the NATO alliance.
On that aspect, US President Trump and EU President Von Der Leyen haven’t planned any meeting during the WEF, a first.
US stock Futures, which are trading, albeit on thinner volumes, are getting sold off aggressively, and this isn’t helping the US dollar or US Treasuries, which are also getting rejected, pricing in more US risk premium. Stock Markets are closed today in celebration of Martin Luther King Day.
Gold and Silver, on the other hand, have gapped higher to new all-time highs.
Will this be another TACO? Time will tell, but the US president sure is unpredictable.
It could also be a distraction for the ongoing military movements in the Middle East regarding Iran, but it is just a theory for now.
Let’s take a look at the Dow Jones, Gold, and the US Dollar to spot where things are to start this already volatile week.
