Report
EUR 9.28
For Business Accounts Only
http://track.com/articles/the-morning-track-bumpy-roads-rba-stevens-hits-a-german-zew-hits-eur-usd-bid-with-harker-2/
The Trump slump was short-lived as the power of buying-the-dip took over US markets yesterday. The bump back up in risk seems, half-hearted though, making many fear a Trump dump should US politics get stranger with an agenda today full of US economic data, more bond supply and Fed speakers including Yellen - there is little time to enjoy the return to “normal†trend. Trump plans to sign executive orders unwinding the climate change actions from Obama. At the heart of today rests the reaction function of central bankers to financial stability – with the long, slow rally up in risky assets from November seen as a bubble more than a bump up to fair value unless and until the US grows faster with more productivity and with clarity on taxes. The unwinding of risk yesterday was hardly significant – even though painful for those long. Safe-havens didn’t break their targets – namely JPY at 110 barrier or Gold at 200-day - so we may be in for more consolidation rather
than trend return of stronger equities and stronger USD. Overnight the USD recovered modestly from an 4 ½ month low. The US isn’t alone in bubble watches. The UK has its own trouble with the Scottish parliament expected to call for another independence referendum today opening another Pandora’s box add to a long list of worries - house-prices, GBP induced inflation and 2-years of talks with the EU ahead. The fact that GBP is holding unchanged against the USD today says volumes about how to assess the risk mood going into the US data – its sour still and the USD points to more downside than upside risks.
The Morning Track bumpy-roads-rba-stevens-hits-a-german-zew-hits-eur-usd-bid-with-harker-2
- The Morning Track – Bump by Bob Savagehttp://track.com/articles/the-morning-track-bumpy-roads-rba-stevens-hits-a-german-zew-hits-eur-usd-bid-with-harker-2/
The Trump slump was short-lived as the power of buying-the-dip took over US markets yesterday. The bump back up in risk seems, half-hearted though, making many fear a Trump dump should US politics get stranger with an agenda today full of US economic data, more bond supply and Fed speakers including Yellen - there is little time to enjoy the return to “normal†trend. Trump plans to sign executive orders unwinding the climate change actions from Obama. At the heart of today rests the reaction function of central bankers to financial stability – with the long, slow rally up in risky assets from November seen as a bubble more than a bump up to fair value unless and until the US grows faster with more productivity and with clarity on taxes. The unwinding of risk yesterday was hardly significant – even though painful for those long. Safe-havens didn’t break their targets – namely JPY at 110 barrier or Gold at 200-day - so we may be in for more consolidation rather
than trend return of stronger equities and stronger USD. Overnight the USD recovered modestly from an 4 ½ month low. The US isn’t alone in bubble watches. The UK has its own trouble with the Scottish parliament expected to call for another independence referendum today opening another Pandora’s box add to a long list of worries - house-prices, GBP induced inflation and 2-years of talks with the EU ahead. The fact that GBP is holding unchanged against the USD today says volumes about how to assess the risk mood going into the US data – its sour still and the USD points to more downside than upside risks.
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Robert Savage
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