Renewed political turmoil in France and the prospect of a more expansive fiscal policy in Japan are causing increased volatility on the currency markets at the start of this week. The dollar is benefiting, despite the prospect of further interest rate cuts by the Fed. How long will this last?

Gold, gold miner stocks, and silver have staged powerful rallies, but chart patterns warn a sharp correction may be close.

Despite strong macro drivers - Fed rate cuts, fiscal concerns, and geopolitical risks - much of the optimism may already be priced in. 

Are we witnessing the final euphoric phase before a major reversal?

For the US economy and Fed policy, the big question is what will prevail: the deteriorating labor market or a number of positive forces? In any case, we suspect that investors are assuming too many interest rate cuts, which means we can expect considerable volatility in the equity, interest rate, and FX markets in the coming period.