Who’s in charge of ‘splaining things to the prez?  Trump says he wants a cheaper dollar so the US can be more competitive in global trade.  Yet, because the US is a net importer, a cheaper dollar will simply increase the cost of imported goods (just like tariffs.)

The net effect will be higher inflation which will in turn make it that much less likely for the Fed to lower interest rates — a frequent topic of Trump’s tantrums.

Sometimes interest rates and the DXY play nicely; sometimes they don’t.  Rates have already settled quite a bit lower even as the dollar edges slightly higher.

Perhaps Larry “King Dollar” Kudlow should also explain to Trump that a breakdown in the dollar (the dashed red trendlines) is sometimes detrimental to inflated stock prices — a frequent topic of Trump’s boasts — while a breakout (the purple TL) can be very positive.And, while it’s possible Powell can be intimidated, who among us would be surprised if the Fed ignored the next opportunity to cut rates — no matter how justified — in order to send the message that they won’t be bullied?

Futures are edging lower as the SMA10 edges higher, setting up the another test of the first line of defense.Speaking of tests, we should find out today how much support DB can expect from the ECB et al.

continued for members…

The equity picture remains a little muddled.  ES has broken down a little bit, but another TL of support and the SMA10 count as decent support.  The little H&S pattern which completed targets 2935.The SPX version with potential downside targets… Naturally, we’d want to see VIX break out if we’re going to get very bearish…CL and RB could still break either way.  A positive note for bears…RB’s attempted breakout has (so far) failed.  Still looking for both to drop, especially as it fits with Trump’s goal of forcing/inducing lower interest rates. On the currency front, USDJPY’s breakout continues… …though it is testing the a pretty substantial-looking TL.EURUSD’s little rising channel has officially broken down.  Sure, it could be resurrected, but this doesn’t bode well for dollar weakness.  Nor does the fact that DXY broke back into its formerly broken rising white channel. While the 2s10s is back in neutral territory, it remains to be seen whether it can avoid breaking down. Last, AAPL and BA continue to look weak. More later.

UPDATE:  2:30 PM

Another one of those painful/silly/pathetic days where the algos are revved up to ensure no declines before Powell’s testimony.  I hope I’m wrong, but I can’t imagine him saying anything controversial  – especially with a decision coming up in a few weeks.