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http://trackresearch.com/articles/the-morning-track-defanged/
Yesterday was green, today is red. Defenestration maybe the thought as 1Q grinds towards an end and profits in any asset class other than cash are hard to find. The euphoria that started 2018 has jumped out the window and is replaced with pain – like having a tooth pulled. The failure of FAANG shares in the US yesterday – blamed on Trump talk of blocking Chinese investment in US technology and by the WSJ on regulation threats post Facebook’s data mess – remains the main thematic driver overnight. Other macro wobbles become less important and we all become equity traders. The UK Irish Border problem stands out as one issue – with new plans for a fix imminent according to the press. The Kim Jong Un promise to push for denuclearization and plans for a US sit down weren’t enough but it helped JPY and KRW with Abe meeting Trump on April 18 and as Trump tweets the need for keeping sanctions and pressure – as the Beijing visit unsettles. The firing up of a North Ko
rea reactor to provide more fuel for nuclear weapons is alos problematic. Trump, Macron and Merkel joining forces to combat China economic practices was a headline that stood out in Asia, but didn’t have follow through in Europe. The Thai central bank kept rates on hold at 1.5% - as expected – but raised its GDP forecast to 4.1% form 3.9%. There isn’t much fear that the teeth rattling in the US means bigger trouble in EM Asia yet. So when you have to look for trouble, you are best to go to the safe-havens. The break out of bonds maybe the most interesting consequence of the price action in equities over the last 24-hours with 2.79% 10Y yields the pivot for a retest to 2.62%. The break of the correlation of fear in equities to USD/JPY or EUR/JPY maybe the other and that is where geopolitics show up – with the JPY and Fiscal Yearend also in play. Watching 106.10 for something bigger while risk of 104.55 retests looms on a return of bears biting.
The Morning Track defanged
- The Morning Track – Defanged by Bob Savagehttp://trackresearch.com/articles/the-morning-track-defanged/
Yesterday was green, today is red. Defenestration maybe the thought as 1Q grinds towards an end and profits in any asset class other than cash are hard to find. The euphoria that started 2018 has jumped out the window and is replaced with pain – like having a tooth pulled. The failure of FAANG shares in the US yesterday – blamed on Trump talk of blocking Chinese investment in US technology and by the WSJ on regulation threats post Facebook’s data mess – remains the main thematic driver overnight. Other macro wobbles become less important and we all become equity traders. The UK Irish Border problem stands out as one issue – with new plans for a fix imminent according to the press. The Kim Jong Un promise to push for denuclearization and plans for a US sit down weren’t enough but it helped JPY and KRW with Abe meeting Trump on April 18 and as Trump tweets the need for keeping sanctions and pressure – as the Beijing visit unsettles. The firing up of a North Ko
rea reactor to provide more fuel for nuclear weapons is alos problematic. Trump, Macron and Merkel joining forces to combat China economic practices was a headline that stood out in Asia, but didn’t have follow through in Europe. The Thai central bank kept rates on hold at 1.5% - as expected – but raised its GDP forecast to 4.1% form 3.9%. There isn’t much fear that the teeth rattling in the US means bigger trouble in EM Asia yet. So when you have to look for trouble, you are best to go to the safe-havens. The break out of bonds maybe the most interesting consequence of the price action in equities over the last 24-hours with 2.79% 10Y yields the pivot for a retest to 2.62%. The break of the correlation of fear in equities to USD/JPY or EUR/JPY maybe the other and that is where geopolitics show up – with the JPY and Fiscal Yearend also in play. Watching 106.10 for something bigger while risk of 104.55 retests looms on a return of bears biting.
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Robert Savage
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