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EUR 8.84
For Business Accounts Only
http://track.com/articles/the-morning-track-engines/
The politics of the US continue to hurt with the short stint of Trump’s communications director a sign of weakness. The actions of Maduro in Venezuela confirm his disdain for democracy as he seizes opposition leaders from his home adding to geopolitical turbulence for a region wanting better news. Overnight, the focus was on PMI reports – the most forward looking economic data for 3Q and it surprised on the upside for the UK – opening up some hope that Brexit just is overblown as a worry for the present trading. Perhaps most importantly, the PMI also showed a slowing in price increases helping some believe the BOE will abstain from hiking Thursday – just like the RBA skipped out today. RBA highlighted the AUD strength issue and so too will other central bankers – just not the BOE. \ The Chinese Caixin PMI also was stronger adding to hopes that the world is still benefitting from 2Q coasting despite clear signals of tighter credit. The world is a four piston en
gine with two speeding up and two slowing down. The US and Asia ex China are slowing while Europe accelerates along with China holding its momentum for now. The PMI reports globally matter today and the role of China and the US in balancing out 2H2017 expectations seems obvious and important. The USD weakness is beginning to show up – particularly in lower export demand. This makes the focus for trading the USD harder as its become a pattern, buying it in Europe and selling in the US as money flows dominate. The EUR reached its target and seems to be in consolidation, while the GBP is still in breakout mode. The 100-week at 1.3539 is the next big target for USD bears – but that will all pivot on 3Q US growth and the ISM today is a good first start as it mixes with PCE inflation and FOMC December outlook. Engines need oil to work properly and that adds to the mix today – with $50 the psychological pivot and the noise from Venezuela important enough to keep markets
on edge.
The Morning Track engines
- The Morning Track – Engines by Bob Savagehttp://track.com/articles/the-morning-track-engines/
The politics of the US continue to hurt with the short stint of Trump’s communications director a sign of weakness. The actions of Maduro in Venezuela confirm his disdain for democracy as he seizes opposition leaders from his home adding to geopolitical turbulence for a region wanting better news. Overnight, the focus was on PMI reports – the most forward looking economic data for 3Q and it surprised on the upside for the UK – opening up some hope that Brexit just is overblown as a worry for the present trading. Perhaps most importantly, the PMI also showed a slowing in price increases helping some believe the BOE will abstain from hiking Thursday – just like the RBA skipped out today. RBA highlighted the AUD strength issue and so too will other central bankers – just not the BOE. \ The Chinese Caixin PMI also was stronger adding to hopes that the world is still benefitting from 2Q coasting despite clear signals of tighter credit. The world is a four piston en
gine with two speeding up and two slowing down. The US and Asia ex China are slowing while Europe accelerates along with China holding its momentum for now. The PMI reports globally matter today and the role of China and the US in balancing out 2H2017 expectations seems obvious and important. The USD weakness is beginning to show up – particularly in lower export demand. This makes the focus for trading the USD harder as its become a pattern, buying it in Europe and selling in the US as money flows dominate. The EUR reached its target and seems to be in consolidation, while the GBP is still in breakout mode. The 100-week at 1.3539 is the next big target for USD bears – but that will all pivot on 3Q US growth and the ISM today is a good first start as it mixes with PCE inflation and FOMC December outlook. Engines need oil to work properly and that adds to the mix today – with $50 the psychological pivot and the noise from Venezuela important enough to keep markets
on edge.
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Robert Savage
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