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http://trackresearch.com/articles/the-morning-track-family-business/
Markets are enjoying happiness – higher equities, higher rates, higher growth hopes, lower USD. The geopolitical dysfunction has been pushed aside or maybe considered normal as USD weakness links back to a growing view that Trump trade barks have no teeth. Economic data that doesn’t fit into the story has been forgotten. Markets are risk-on despite ongoing doubts about Trade Policy with the G7 Quebec meetings seen as the potential turning point with Trump Advisor Kudlow yesterday calling it “a family quarrel.†Trump will meet one-on-one with both his Canadian and French counterparts at the conference before flying to Singapore to meet North Korean leader Kim Jong Un on June 12. The effect has been to see USD drop 1% in four days with overnight continuing the trend. This drives first on rate policy shifts – starting with ECB yesterday and continuing with SEK today – the leader of G10 –as Riksbank Deputy Governor Jochnick reiterated a rate hike is likely toward
year-end. Second effect has been that US policy on trade returns the twin deficits as a drag on the dollar. There are some exceptions for the USD – GBP being prime – as U.K. Prime Minister Theresa May is facing a major cabinet rebellion over Brexit, and the whole government could be destabilized as Brexit Secretary David Davis clashes with her. The focus of markets on rest of world and the lack of fear of a larger US trade war remains the key with positions returning to get to critical size. What seems to be the bellwether is the USD where the break this morning of 93.29 opens bigger rallies in equities ahead.
The Morning Track family-business
- The Morning Track - Family Business by Bob Savagehttp://trackresearch.com/articles/the-morning-track-family-business/
Markets are enjoying happiness – higher equities, higher rates, higher growth hopes, lower USD. The geopolitical dysfunction has been pushed aside or maybe considered normal as USD weakness links back to a growing view that Trump trade barks have no teeth. Economic data that doesn’t fit into the story has been forgotten. Markets are risk-on despite ongoing doubts about Trade Policy with the G7 Quebec meetings seen as the potential turning point with Trump Advisor Kudlow yesterday calling it “a family quarrel.†Trump will meet one-on-one with both his Canadian and French counterparts at the conference before flying to Singapore to meet North Korean leader Kim Jong Un on June 12. The effect has been to see USD drop 1% in four days with overnight continuing the trend. This drives first on rate policy shifts – starting with ECB yesterday and continuing with SEK today – the leader of G10 –as Riksbank Deputy Governor Jochnick reiterated a rate hike is likely toward
year-end. Second effect has been that US policy on trade returns the twin deficits as a drag on the dollar. There are some exceptions for the USD – GBP being prime – as U.K. Prime Minister Theresa May is facing a major cabinet rebellion over Brexit, and the whole government could be destabilized as Brexit Secretary David Davis clashes with her. The focus of markets on rest of world and the lack of fear of a larger US trade war remains the key with positions returning to get to critical size. What seems to be the bellwether is the USD where the break this morning of 93.29 opens bigger rallies in equities ahead.
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Robert Savage
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