EUR 9.38 For Business Accounts Only

The Morning Track cloudy-2

- The Morning Track - Cloudy by Bob Savage
http://track.com/articles/the-morning-track-cloudy-2/

The shadow of sorrow cast for the terror victims in Zurich, Berlin and the deaths in Ankara leaves outlooks cloudy. Markets are nearly flat with volumes light as no one wants to challenge the trends nor to add to positioning into the holidays. Fear and loathing haven’t yet won over the headlines from geopolitical pain but many see that as the next logical step and so we are waffling in a cloudy mood with Turkey not raising rates despite the TRY weakness, Hungary expected to do nothing at 0.9% even as the HUF outperforms and overnight the BOJ didn’t do anything new either except to acknowledge better outlooks thanks to the weaker JPY. The USD did recover further against Asia and leaves a gnawing doubt in many that this will matter in 2017 for inflation and growth in the US but for now – nothing but clouds and cold. The RBA minutes hint at a rate cut path in the future while the Chinese redouble efforts to control bubbles with WMP the next focus, even as rates there
continue to be very tight. In the UK the CBI retail sales were strong but orders weak and the UK PM May faces the Brexit plan questioning which may matter more than anything else. In Italy, the hope for an easy bail-out for banks remains an issue of how to pay for it and Italian BTPs underperform casting another shadow onto 2017 hopes. No one is quite sad enough to be rattled out of positions but the idea of what is a safe-haven is clearly at play as well. GBP/JPY was the trade yesterday and that unwind on the BOJ - many are thinking its EUR/JPY today given the ongoing doubts about terror and the ECB and banks. EUR 1.0368 and EUR/JPY 120.70 look important but the JPY 118 resistance isn’t special with 118.70 the next big line. Outlooks in FX as in all other markets appear cloudy – so the race to the bottom maybe more of a crawl.