* FX risk trades not confirming stocks rally
* China-US talks to put USD back under scrutiny
* Risk rally really long in the tooth
* GBP softens, BoE QE risk sees some revival on weak data
* Key data and events to watch next week
Stock markets continued to outpace gains in other risky assets, with shares breaking to new highs for the year on the back of a series of better-than-expected 2Q earnings reports. We are extremely skeptical of the sustainability of the current rally in stocks, based on both the fundamental outlook (see below) and the lack of confirmation seen in other risk asset markets. Among key markets failing to make new highs for the year, the CRB commodity index, oil, 10 year US Treasury yields, gold, and the Baltic Dry Index (a proxy for commodity demand) are all well below their highs for the year… Full text »
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