The US dollar managed to end the week on a positive note despite North Korea’s missile launch, low retail sales, and flat US inflation data. In your week ahead we cover probabilities of a US rate hike, inflation in Japan, and tax reform.
Last week's geopolitical worries sent investors scampering for safe havens. Now, the dollar gains seem capped by the tensions on the Korean peninsula and doubts that the Fed will hike interest rates again this year.
To what extent the markets need to price in geopolitical risk more actively into their psyche will likely drive nearer term sentiment. It feels like a Dr Strangelove Redux as this game of chicken unfolds.
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