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http://trackresearch.com/articles/the-morning-track-balancing-act/
The week of trading can best be explained by Italian political fears, which were overdone Tuesday, repriced Wednesday, and of no concern Thursday. Focus shifts to risk-on markets with an eye on North Korea summits, US data and the usual month-end rebalancing noise. Overnight the risk rebound started in Asia with better China PMI, but weaker Australian Capex, continued into Europe with flash CPI suggesting the ECB could taper and talk about hikes in 2019 again despite Italy. EUR bid up accordingly and able to ignore the threat of US tariffs as talks on trade deals fail. The pain trade ahead maybe about the crosses to EUR with GBP still about Brexit, CAD perhaps vulnerable to oil and NAFTA unwind risks, EM has been able to bounce except for TRY today and that maybe the biggest reminder that we are back to where we started the week but with higher rates and more troubles ahead. The EUR is the risk barometer still with 1.1760 pivot for 1.1820-40 test. US politics maybe back in
the play of things as the Trump tariffs and failure to get deals sparks a return to US deficit focus, need for capital and the cost of money.
The Morning Track balancing-act
- The Morning Track – Balancing Act by Bob Savagehttp://trackresearch.com/articles/the-morning-track-balancing-act/
The week of trading can best be explained by Italian political fears, which were overdone Tuesday, repriced Wednesday, and of no concern Thursday. Focus shifts to risk-on markets with an eye on North Korea summits, US data and the usual month-end rebalancing noise. Overnight the risk rebound started in Asia with better China PMI, but weaker Australian Capex, continued into Europe with flash CPI suggesting the ECB could taper and talk about hikes in 2019 again despite Italy. EUR bid up accordingly and able to ignore the threat of US tariffs as talks on trade deals fail. The pain trade ahead maybe about the crosses to EUR with GBP still about Brexit, CAD perhaps vulnerable to oil and NAFTA unwind risks, EM has been able to bounce except for TRY today and that maybe the biggest reminder that we are back to where we started the week but with higher rates and more troubles ahead. The EUR is the risk barometer still with 1.1760 pivot for 1.1820-40 test. US politics maybe back in
the play of things as the Trump tariffs and failure to get deals sparks a return to US deficit focus, need for capital and the cost of money.
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Robert Savage
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