by Chris Becker
A mixed Friday characterised another volatile week on risk markets with two important prints accelerating the divergence between the European and US economies. The German CPI preliminary print came in dead flat sending the Euro down while the US 4Q personal consumption expenditure print came in much higher than expected, embiggening the Federal Reserves tightening mandate, although Treasuries sold off slightly. The commodity complex ended the week calmer than usual with only a slight selloff in gold. As usual, Mondays report will stand back and take a longer term view with weekly charts.
Starting with the Shanghai Composite which was sliced to ribbons on Thursday, falling more than 6%, it ended the week up 1% on Friday. You can see the deflation of this epic bubble much more clearer on the weekly chart where the terminal target of 2000 points still remains:
