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http://trackresearch.com/articles/the-morning-track-friday-games/
Friday isn’t the day to build cars or buy risk but rather to wait for the lights to turn on and watch the next game. This is also the end of the normal trading into Thanksgiving, Black Friday and the inevitable Christmas Holidays. December holds plenty of risks with the tax debate, debt ceiling, and other hard political choices ahead. Today is not even close to a play-off event. Even so, markets are nervous as we open the US with little to prevent a modest profit taking from yesterday’s hard-earned bounce back in equities, credit and the USD. The USD is weak off 0.2%, but not alone in currency pain with NZD touching June 2016 lows off 1%. There were two main stories that turned the risk overnight - 1) Robert Mueller has issued subpoenas to Donald Trump’s campaign requesting Russia-related documents. 2) North Korea is building a ballistic Missile submarine. The list of other notable stories are more about EM with Moody’s upgrade to India bonds to Baa2 – first up
grade since 2004 – a surprise – while the Bank of Indonesia keeps rates on hold at 4.25% - as expected. There was a dearth of data – NZ PMI and PPI were not bad and don’t explain the shove in NZD lower, even as commodities are mostly bid, risk is mixed. The US data on housing starts is unlikely to matter in changing the tender risk off mood even as other news agenda items loom like the Senate Finance committee expected to pass its GOP tax reform bill today and push it to Senate for debate into next week. NAFTA talks this weekend in Mexico ongoing to March and Chile Presidential election on Sunday with Dec 17 run-off vote. What this means for today isn’t so clear – but we do know that the FX markets favorite risk-off tool is the JPY and its soggy with risk for 112.25 and 111.65 there-after (Oct 16 lows). This maybe the currency to watch as rates, equities and politics mix into a difficult match.
The Morning Track friday-games
- The Morning Track – Friday Games by Bob Savagehttp://trackresearch.com/articles/the-morning-track-friday-games/
Friday isn’t the day to build cars or buy risk but rather to wait for the lights to turn on and watch the next game. This is also the end of the normal trading into Thanksgiving, Black Friday and the inevitable Christmas Holidays. December holds plenty of risks with the tax debate, debt ceiling, and other hard political choices ahead. Today is not even close to a play-off event. Even so, markets are nervous as we open the US with little to prevent a modest profit taking from yesterday’s hard-earned bounce back in equities, credit and the USD. The USD is weak off 0.2%, but not alone in currency pain with NZD touching June 2016 lows off 1%. There were two main stories that turned the risk overnight - 1) Robert Mueller has issued subpoenas to Donald Trump’s campaign requesting Russia-related documents. 2) North Korea is building a ballistic Missile submarine. The list of other notable stories are more about EM with Moody’s upgrade to India bonds to Baa2 – first up
grade since 2004 – a surprise – while the Bank of Indonesia keeps rates on hold at 4.25% - as expected. There was a dearth of data – NZ PMI and PPI were not bad and don’t explain the shove in NZD lower, even as commodities are mostly bid, risk is mixed. The US data on housing starts is unlikely to matter in changing the tender risk off mood even as other news agenda items loom like the Senate Finance committee expected to pass its GOP tax reform bill today and push it to Senate for debate into next week. NAFTA talks this weekend in Mexico ongoing to March and Chile Presidential election on Sunday with Dec 17 run-off vote. What this means for today isn’t so clear – but we do know that the FX markets favorite risk-off tool is the JPY and its soggy with risk for 112.25 and 111.65 there-after (Oct 16 lows). This maybe the currency to watch as rates, equities and politics mix into a difficult match.
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Robert Savage
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