EUR 9.38 For Business Accounts Only

The Morning Track deep-and-crisp-and-even

- The Morning Track - Deep and Crisp and Even by Bob Savage
http://track.com/articles/the-morning-track-deep-and-crisp-and-even/

Markets are waiting it out. Perhaps traders are humming Christmas Carols instead of screaming out new prices We are moving into the illiquidity zone for trading and so anything that happens maybe just noise and not so much about the real news or data or decisions made. The news overnight focused on China property prices dropping back, Japan trade improving – particularly in Asia, the Australian Mid-Year Budget – sane enough to keep S&P from downgrading its precious AAA status, the start of the Monti-dei-Paschi E5bn capital raise, the stronger German IFO and the relative calm response of the US to the Chinese capturing of an underwater drone in international waters. The muted US response puts Asian allies like Japan, Korea and Taiwan on call for more brazen Chinese control of the region. For his part, US President Elect Trump tweeted over the weekend, “We should tell China that we don’t want the drone they stole back — let them keep it!” The noise of politics i
s unlikely to slow today given that Trump passes the final hurdle today with the Electoral College vote. Expect more from him and from the media on his cabinet. All of these leave clear that the risk-on and risk-off mood typical of a pre-holiday week maybe in play and that lifts the USD/JPY back into the spot-light after losing out to the EUR and its 1.05 break last week. The JPY is watching 116.80 for support – and its held well – leaving room for risk to return with 118 and higher on the agenda.