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http://track.com/articles/the-morning-track-attributions/
The blame game for day three of a risk-off market falls back to the US/North Korea tensions as Trump late yesterday said his previous “fire and fury†comment was probably not strong enough. China joins in the war of words warning both sides. There is a logical process to attributions – linking the outcomes to the people or the situation – and that might be helpful to understanding the raw nerves of the moment as the leadership involved don’t have credibility with the market and so unacceptable outcomes can follow. Simply put the resolution of this conflict will be determined by the talent of Trump and Xi to get their way with Kim Jong Un along with their effort and the luck of the moment. Luck is the difficult part to price and the Friday rules about trading kick in – driving further position adjustments. Risk has left many ignoring the slight news from overnight as European inflation reports were all in line and lower – leaving room for ECB to wait on taper
ing. The China revenues were higher and spending lower – helping ease some credit doubts while the RBA sounded dovish. Markets are waiting for the US CPI and the reaction form Fed speakers to what it means. The pain of risk-off is that there really isn’t anyone perfect hedge for the moves as its about positioning first. The bond market rally overnight is worth watching as it’s the key component for much of FX and with the break of 2.21% the 2.15% and 2.12% 10Y levels look important.
The Morning Track attributions
- The Morning Track – Attributions by Bob Savagehttp://track.com/articles/the-morning-track-attributions/
The blame game for day three of a risk-off market falls back to the US/North Korea tensions as Trump late yesterday said his previous “fire and fury†comment was probably not strong enough. China joins in the war of words warning both sides. There is a logical process to attributions – linking the outcomes to the people or the situation – and that might be helpful to understanding the raw nerves of the moment as the leadership involved don’t have credibility with the market and so unacceptable outcomes can follow. Simply put the resolution of this conflict will be determined by the talent of Trump and Xi to get their way with Kim Jong Un along with their effort and the luck of the moment. Luck is the difficult part to price and the Friday rules about trading kick in – driving further position adjustments. Risk has left many ignoring the slight news from overnight as European inflation reports were all in line and lower – leaving room for ECB to wait on taper
ing. The China revenues were higher and spending lower – helping ease some credit doubts while the RBA sounded dovish. Markets are waiting for the US CPI and the reaction form Fed speakers to what it means. The pain of risk-off is that there really isn’t anyone perfect hedge for the moves as its about positioning first. The bond market rally overnight is worth watching as it’s the key component for much of FX and with the break of 2.21% the 2.15% and 2.12% 10Y levels look important.
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Robert Savage
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