EUR 9.28 For Business Accounts Only

The Morning Track absolute-zero

- The Morning Track – Absolute Zero by Bob Savage
http://track.com/articles/the-morning-track-absolute-zero/

There is a temperature where nothing moves -273.15*C– this maybe something to think about as central bankers cling to market stability and easy money to hold the global economies together even as politicians do their best to heat it up with talk and other more bellicose ideas. Absolute zero returns are another issue – but that is left to traders and investors. The temperature for risk is still chilly if not outright cold despite the modest price action. This market is like the North Pole marathon – it will be slower with fewer participants but still the same 26.2 miles and the winners may find they wish for better climates rather than any medal. There were plenty of things trying to move overnight – gold, oil, bonds, stocks, but not the USD. The moves in GBP from 1.25 to 1.29 was the outsized trigger yesterday for holding FX in consolidation today. Risk flipped from off to on from Asia to Europe as the hope for growth returns. Headlines from geopolitics are not q
uite as friendly – with the US considering shooting down the next N.Korean missile test, with the French election truly too close to call for the top 4 candidates, and with the UK June 8 election seen as a wonderful exercise in democracy not quite like that shown by Erdogan in Turkey with his referendum. The economic data just didn’t matter and so inflation and trade from the EU or Australian LEI pales against the power of the FOMC Beige book to drive markets today. We are all back to rethinking risk and rewards with the USD seen as the thermometer particularly, USD/JPY, but the moves in EUR and GBP are just as notable yesterday – leaving the US dollar index back watching the 200-day at 99.06 for support.