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The Morning Track between

- The Morning Track – Between by Bob Savage
http://trackresearch.com/articles/the-morning-track-between/

Between the lack of bad news from US/China trade and the good news from Germany’s Merkel and France’s Macron in agreeing to a “new chapter” for the EU regarding a real budget, lives today’s mild risk recovery. Better global equities balances against higher rates, a mixed USD with emerging markets bouncing but G10 weaker while commodities rally modestly waiting for OPEC and more data. What looms ahead is another UK Brexit vote and the central bankers panel with FOMC Powell and ECB Draghi. Also hanging over the market is the stark warning from China’s Ministry of Commerce to “buckle up” suggesting it will resort to all means to "inflict maximum damages" to the Donald Trump administration. Its statement said China will take "comprehensive measures" combining both quantitative and qualitative measures. Sending a different signal, PBOC Yi Gang appealed for calm – particularly in equities. The North Korea Kim visit to Xi in Beijing is another twist as it hig
hlights the key role of China in any peace hopes for the peninsula with press reports suggesting Kim is looking for economic deals more than nuclear advice. The between quality of markets today is important as this is more a pause in the bear dance than a waltz back for the bulls. Many are looking at the price action as an opportunity to sell the bounce and emerging markets remain on the front lines of such thinking. The data on the rest of the world was modest again with Australian LEI turning down, Japan BOJ minutes worrying about losing inflation expectations, NZ current account worse, German PPI higher and UK CBI industrial trends better. Nothing there to matter as much as whether the USD is going to remain bid and with month end rate squeezes its hard to fade. This maybe the real space between big trades to watch with 95.50 US dollar index looking like the next key resistance zone.