EUR 9.28 For Business Accounts Only

The Morning Track confused-3

- The Morning Track - Confused by Bob Savage
http://track.com/articles/the-morning-track-confused-3/

Between Trump sacking FBI Comey with the democrats calling for a special investigation into the Russian connections and with North Korea baiting the US as the ambassador says it will destroy US assets along with promises to continue their nuclear ambitions – all that just didn’t matter much to markets as we have been trained to ignore geopolitics and pay attention to central banks. QE and the TINA (There is no alternative) to equities drives markets with volatility still low everywhere. The fear factors are enough to keep the rate moves that started to gain momentum yesterday in check and that might be the key for clarity today. Overnight news was also mixed with China CPI higher but PPI lower than expected. This puts fears of the PBOC tightening hitting the economy and global growth into further question for those trading for a larger reflation. With the BOJ minutes suggesting no shift in policy but Kuroda admitting that QE maybe closer to Y60trn and with European da
ta adding to recovery views – IP in France and Italy holding positive trends supporting ECB taper talk hopes. Trading rates for a bigger break higher in the US lifted the USD yesterday and it holds today but many see the world as more about the rate spreads with Japan and Europe key to the ongoing QE/easy money global story. For traders, the risk-on mood in Asia surprised particularly in Japan while in Europe its less clear and that leaves the US market to balance it all out – with oil rally back notable. The US dollar index maybe the one to watch as it looks to have set up for a bigger base yesterday but momentum needs to continue.