E Market Briefing For Monday, Jan. 14

A market on tenterhooks - just shy of resistance (and a 'congestion zone') has everyone debating the obvious concerns facing the market (and Nation) while we are focused on 'how' the market ends the projected seasonal relief swing higher into January, rather than expecting any dramatic levitation.  

For sure, if the market were advancing from an oversold condition, I'd share a more optimistic view regarding 'duration' of the rebound, but if 'good news' (and of course that presumes we get good news) occurs at this level or just a hair higher, then I believe it will be perhaps energetic briefing; but likely to then be faded by traders.   

Amidst all this, there is something brewing in Europe (if they conclude their pact); that might also be indirectly the counter to the Yellow Vest protests (it is noted they continue again Saturday; though losing broad social support).

What is it? Later this month, German Chancellor Angela Merkel and French President Emmanuel Macron likely sign the 'Aachen Treaty'. That governs a coordinated diplomatic front and even joint actions on peacekeeping (EU Army essentially?) missions; with an unclear linkage to NATO coordination. 

Additionally, 'rumor has it' that areas on both sides of the Franco-German border will be encouraged to establish 'Eurodistricts' in which both countries would merge water, electricity and public transport networks.  

The Times (of London) believes Berlin & Paris will offer cash to incentivize the cross-border areas; involving shared hospitals, joint business schemes or environmental projects. Some officials regard these experiments as a petri dish for the integration of the EU. How this impacts Brexit (and a fight this coming week in Parliament) is unclear; nor how peripheral EU member states will respond. Italy, Hungary and Poland come to mind as likely not to be enthused about even-greater concentration of power in the largest two economic powers of the EU. In some ways this may seem natural though; if they make it clear how the other member-states will be impacted. France of course has a permanent UN Security Council Seat; and Germany wants to have one as well. Will the 'Aachen Treaty' speed that prospect along?     

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