Guess & Win إحزر المخطط و إربح

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It's not because market participants are currently consumed by the meme stock madness. The flows around it have certainly caused some broader market moves but the FX market is largely unperturbed.

GDP in the $22 trillion US economy is certainly more consequential than a $25 billion short squeeze but only one moved the market on Thursday. Some are seeing the squeeze as indicative of vulnerability in the broader market and that may be the case but it's not going to change the path of the broader economy.

Q4 GDP grew at a 4.0% annualized pace compared to 4.2% expected. That's not a big miss but consumer spending was particularly soft, something we've seen in the Nov/Dec retail sales reports.

So why didn't it matter? Or why didn't the surprisingly strong German CPI report matter?

The market simply doesn't care about the current economy. What matters is the post-vaccine economy and current economic data simply doesn't tell us much about how consumers and businesses will behave in the return to 'normal'.

Central banks believe the major economies will take years to recoup losses and generate inflation. That may be the case. Some market participants think the release of pent-up savings and demand will cause problematic inflation.

What's priced in is a rosy economy but nothing too hot to push up rates. That's a reasonable expectation but so many things about the pandemic have been hard to predict. We've written recently about the questions about pent-up savings and about watching early-vaccinators like Israel for economic signs. We also think surveys showing rising inflation are telling and worrisome but it's early.