Stock markets: Reuters estimates that global stock markets lost over $1 Trillion (1.3%) in value this week as rising tensions between American and North Korea caused prices to fall. The benchmark S&P 500 Index hit All Time Highs on Tuesday but Friday's close was the lowest in over a month, creating a Weekly Key Reversal Down on the charts.

It's an interesting combination: The major US stock indices keep making new All Time Highs, the USD has fallen ~11% since December with bearish sentiment at an extreme, credit quality spreads are narrow and volatility is extremely low across asset classes. In other words, the markets look to be set up for "change."

The USD index had its lowest weekly close in 15 months, down 10.5% from the 14 year highs made in December when bullish sentiment was at its peak on Trump’s “Make America Great Again” and as the Fed was raising interest rates while other Central Banks were not.

The anticipation of future Central Bank action/policy drove markets again this week as Yellen sounded dovish in congressional testimony while Poloz maintained a hawkish tone.

The Canadian Dollar has risen 5 cents over the past 2 months to its best levels in nearly a year. Two months ago on May 5 CAD began to rally in sync with crude oil and rallied step-for-step with crude for the next 20 days until the May 25 OPEC meeting. Since then crude has trended lower (down as much as $10) while CAD has trended higher, rising 3 cents while crude was falling.

Key events this week:

1) major US stock market indices hit new All Time Highs (again)

2) US Treasury bond yields hit their lowest levels since the November election

3)WTI futures dropped to a 10 month low 

4) the CRB commodity index fell to a 14 month low

Our thoughts on select markets as we wrap up the trading week.

Key events this week:

1) Bank of Canada signaled a change in interest rate policy

2) Federal Reserve was more “hawkish” than expected

3) WTI was hit with more bearish news

Our thoughts on select markets as we wrap up the trading week.

Our thoughts on select markets as we wrap up the trading week.

Our thoughts on select markets as we wrap up the trading week.

Crude Oil: As Good As It Gets!