EUR 9.28 For Business Accounts Only

The Morning Track catch-up

- The Morning Track – Catch-up by Bob Savage
http://track.com/articles/the-morning-track-catch-up/

Sometimes meals need a spice to make them palatable – so too markets that can get stuck in a rather dull trading range. The history of catch-up maybe the appropriate lesson to consider on May 2 – with the picked fish and spice sauce making its way to the English colonies. Today is a catch-up trade day with many more focused on price than news. The economic story is all about he PMI reports with GBP and the UK PMI the biggest outlier as the bounce back there puts Manufacturing at 3-year highs. The EU reports were in line while the China Caixin was weaker and suggests 2Q won’t be as robust as 1Q for growth – that doesn’t matter much to the region as equity inflows dominate the story overnight. We are living the trend of low equity volatility and high carry trades driving the Emerging Markets again. The RBA didn’t seem to care much either – staying on hold despite housing bubble issues and getting more upbeat on growth. BOJ minutes are perhaps the most reveali
ng given that higher rates outside didn’t matter inside the nation where the Composite PMI suggests 2Q growth moderates as well. With little to expect from the US other than auto sales, focus is likely to revert back to the Trump bank breakup talk and the Mnuchin ultra-long bond issuance ideas to drive markets along with a bevy of 1Q earnings reports including Apple. This is a market bent on risk taking and the JPY is the big mover on the day again. Most will be watching to see if New York can keep the JPY over 112.20 so that 113.35 100-day gets back into play over the rest of Golden Week.