EUR 9.38 For Business Accounts Only

The Morning Track between-flights

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

The Trump inflation trade stalled yesterday and continued to lack gas today – and oddly that means oil is higher, bonds are bid, and the USD sags. Call me old fashioned but oil should be inflationary and the drop yesterday was a key driver for the bond rally, equity turnaround. The logic of the moment is like waiting for a flight – you wonder if the delays are a vain attempt by the airline to fill the plane. Demand drives supply today or so some in economics would like us to believe. The fact that oil is holding over the 200-day maybe important and the same is true for US 10Y yields as they are stubbornly holding above 2.21%. The 200-day average isn’t magic but it does reflect close to the yearly average and it represents something to many investors about bull or bear trends in a market full of volatility. The “Trumpflation” trade as many are now calling it stalled mostly because of exhaustion, but overnight the data mattered. Both China and Russia are clearly
trying to build some relationship with Trump while Europe is trying to bolster its own defenses. The UK CPI was a shock and disappointed inflation believers – making the best performing currency since Trump was elected fall back with all eyes on its shorter term 21 day moving average at 1.2315. The AUD was flat even as the RBA was balanced in the minutes, Lowe was sanguine on inflation but the IMF much less so. The 200-day there is a .7508 and it too seems important on the day. So with all of that we actually get some economic data from the US that might matter- US retail sales with expectations for better times ahead, we have to believe those people looking for other places to live have yet to book their flights. Markets are waiting just like the planes.