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EUR 8.46
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The rally up in the USD dominates price action today. The EUR slips to 16-month low as the 1.13 barrier breaks with 1.1187 the next target all on fears about Italy and Brexit. GBP loses 1% as deals continue to elude for UK/EU and politics continue nag. Oil stabilizes as Saudi unilaterally cuts its output and sees need for 1mbd more cuts in 2019 but OPEC pushes back with 106% compliance in October. The USD rally and the Oil rally aren’t enough for Europe. The fears over growth, ECB policy, EU/Italian budget clashes, EU/UK Brexit deal failures and ongoing political discord from Germany to France all make the start of the week less obvious. Many would like to believe that US divergence with growth and rates continues and that the USD is not playing a safe-haven role today as much as an obvious investment flow barometer. Whether this proves out will be hard to tell given this is a US bond holiday and that many see the markets as waiting for the more important CPI and FOMC
Powell speech to decide. US rate sensitive sectors will be important to watch this week along with the usual rotational plays into year-end as many want to hear that all-clear siren for risk but hearing that for the noise of the news headlines maybe hard. The trend up in the USD seems clear with 96 base and 98 short-term target and perhaps that is all we need, as the correlations to other markets fray like the faith that it’s going to be a sunny day.
The Morning Track all-clear-2
- The Morning Track – All Clear by Bob Savage/articles/the-morning-track-all-clear-2/
The rally up in the USD dominates price action today. The EUR slips to 16-month low as the 1.13 barrier breaks with 1.1187 the next target all on fears about Italy and Brexit. GBP loses 1% as deals continue to elude for UK/EU and politics continue nag. Oil stabilizes as Saudi unilaterally cuts its output and sees need for 1mbd more cuts in 2019 but OPEC pushes back with 106% compliance in October. The USD rally and the Oil rally aren’t enough for Europe. The fears over growth, ECB policy, EU/Italian budget clashes, EU/UK Brexit deal failures and ongoing political discord from Germany to France all make the start of the week less obvious. Many would like to believe that US divergence with growth and rates continues and that the USD is not playing a safe-haven role today as much as an obvious investment flow barometer. Whether this proves out will be hard to tell given this is a US bond holiday and that many see the markets as waiting for the more important CPI and FOMC
Powell speech to decide. US rate sensitive sectors will be important to watch this week along with the usual rotational plays into year-end as many want to hear that all-clear siren for risk but hearing that for the noise of the news headlines maybe hard. The trend up in the USD seems clear with 96 base and 98 short-term target and perhaps that is all we need, as the correlations to other markets fray like the faith that it’s going to be a sunny day.
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Robert Savage
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