EUR 8.50 For Business Accounts Only

The Morning Track endings-2

- The Morning Track – Endings by Bob Savage
http://track.com/articles/the-morning-track-endings-2/

There is a sense of scrambling to get over the 3Q finish line today. A dash to make the books look as strong as possible to set up for 4Q. This price action probably means less than the actual economic data ,which requires a heavy dose of coffee to grind through and analyze. The overnight news flows were important starting with Japan as CPI rises for the 8th month to cycle highs but still is well below the 2% BOJ target. Industrial production, household spending, jobs – all are doing their part to make the Abe snap election call look smart if it were just about relative economic gains. There have been 3 million jobs added to the economy since he took office in 2012. For their part the BOJ left is bond buying plans unchanged from September and JGBs rallied meekly for the first time in 4 days. The European data was less clear with the flash HICP not up and with German and French consumer spending lagging even with German unemployment dropping further. The Bank of Italy’s
EuroCoin (GDPnowcast) for Europe rose again in August – and perhaps that matters more as the EUR rallies despite reflation stalling,

This leaves the rally back in EU bonds in play to the US data still left on the docket today with core PCE, personal income and spending, Chicago PMI and Michigan Sentiment all potential game changers. Also pay attention to the Canadian GDP and more Fed speakers – along with the ongoing BOE conference where Carney remains the unreliable boyfriend to rate hikes. Throw in the Riksbank where Ingvess and Jochnick’s mandates for running the easy money game are extended for 5 more years. The UK GDP revision hurt while the C/A deficit gets worse – leaving GBP vulnerable again. The rally up in EUR today and the selling off in GBP maybe worth watching more closely for what it means to the USD and its vulnerability – with GBP like the USD looking for a more substantial break out – but for politics, rates and data. GBP 1.3314 looks important today with 1.3515 needed to break to regain momentum and hope for a stable October.