EUR 8.70 For Business Accounts Only

The Morning Track child-games

- The Morning Track – Child Games by Bob Savage
http://trackresearch.com/articles/the-morning-track-child-games/

The risk-on mood return Monday is like a child’s game, as the fears over global trade wars reverse, taunting those filled with cash to play on or go home. Some of this turn about follows reports from the WSJ that China and US Treasury Mnuchin are talking trade deals – US wants more access, China wants more technology. The Korea trade deal was also supportive for risk – getting the steel tariff exemption - along with North Korea agreeing to inter-Korea talks March 29. Bears find little solace in the price action either as bonds and equities return to the See-Saw – S&P500 up 1% in futures, US 10Y bonds down with yields up 3bps. Oil rallied on the Saudi intercepting of Yemeni missiles but reversed with China officially opening crude oil futures today. The USD gets no respect from rates and sinks across Asia and Europe with JPY and CHF the exceptions. Europe has seen scant economic news other than the big 3 economic think tanks ratcheting up their forecasts for growth
and with the news that the former Catalonia leader Puigdemont was arrested in Germany – seen as bolstering the Spanish political position – along with the S&P ratings raise to A- from BBB+ late Friday. ECB Weidmann talked up his book – suggesting the first rate hike in mid-2019 make sense. All of this puts markets back onto risk-on and like a yo-yo, prices flip on the charts. The one barometer for this game that matters into the start of the month was EUR/JPY and that might be a good place to watch for risk-off returning if 131 and 131.90 fail to break today or tomorrow.