Equity markets crashed lower following the extended long weekend in the US, as threats of a US/European trade war erupt once again. Trump has decided to impose increased tariffs on recalcitrant European States, who defy the American take-over of Greenland. European States are effectively powerless to defy the Americans and have become vassal states to the USA. They are dominated politically and now dependent for energy and military power. Greenland shows the total power the US now has over Europe. The global pantomime now shifts to Davos, where world leaders gather for the WEF conference and the Geo-Politics continues to impact markets. The USD softened, allowing the EUR to jump to 1.1730, while the GBP regained 1.3450.
The weaker reserve allowed commodity currencies to regain lost territory, with the AUD surging through 0.6700, while the NZD trade wells above 0.5800. Japanese bond yields continue to rise into record territory, as markets fear the political uncertainty of a snap election, called for February the 8th.
