Report
EUR 8.14
For Business Accounts Only
http://trackresearch.com/articles/the-morning-track-gaslighting/
Reality for markets is price and volume but confidence and the will to trade wrap around the forward guidance from central bankers and politicians along with CEOs. The battle for the bulls today revolves around earnings and guidance. The Bank of England Carney BBC interview unwound the GBP and lifted Gilts yesterday and is the battleground for trend players today as the reversals put into doubt whether other central bankers follow the Fed in normalization regardless of economics. Is the battle over getting back to usual or inflation. The BOJ may look at the data last night and shrug – with Reuters Tankan diving and CPI low and going nowhere. The 1Q global slowdown due to weather remains a story not a fact – as there maybe larger forces at play. The unreliable boyfriend quality of forward guidance showed up yesterday and the effect of gas-lighting the markets seems clear. If you tell markets that the economy isn’t strong enough for real rates to go up and to fear Bre
xit, they will begin to believe it and act accordingly. Tell them winter was too cold, even as they sweat in the sunny Spring, they will shiver. Then comes the confusion with BOE Saunders making the hawkish case - "With spare capacity largely used up and cost pressures rising, I believe the economy no longer needs as much stimulus as previously," Saunders said in his speech at the University of Strathclyde today. The problem is that with inflation over 2% and with QE ongoing and rates at 50bps – the implied rate hikes to get to 1.25% are 3 years from now. This too is the problem for the ECB. Compared to the FOMC which talks of steady hikes through 2019 – read Mester’s speech – the risk is on the upside for EUR and GBP rate moves. Or so the market acts accordingly as FX lags. The drop in gold and palladium prices overnight highlight the return of focus from geopolitics to policy and economics – we are back to inflation and growth, wages and debt as key drivers.
The breakdown of EUR this morning maybe the key to understanding the rest of the global macro story unwind with 1.2250 and 1.2209 important.
The Morning Track gaslighting
- The Morning Track – Gaslighting by Bob Savagehttp://trackresearch.com/articles/the-morning-track-gaslighting/
Reality for markets is price and volume but confidence and the will to trade wrap around the forward guidance from central bankers and politicians along with CEOs. The battle for the bulls today revolves around earnings and guidance. The Bank of England Carney BBC interview unwound the GBP and lifted Gilts yesterday and is the battleground for trend players today as the reversals put into doubt whether other central bankers follow the Fed in normalization regardless of economics. Is the battle over getting back to usual or inflation. The BOJ may look at the data last night and shrug – with Reuters Tankan diving and CPI low and going nowhere. The 1Q global slowdown due to weather remains a story not a fact – as there maybe larger forces at play. The unreliable boyfriend quality of forward guidance showed up yesterday and the effect of gas-lighting the markets seems clear. If you tell markets that the economy isn’t strong enough for real rates to go up and to fear Bre
xit, they will begin to believe it and act accordingly. Tell them winter was too cold, even as they sweat in the sunny Spring, they will shiver. Then comes the confusion with BOE Saunders making the hawkish case - "With spare capacity largely used up and cost pressures rising, I believe the economy no longer needs as much stimulus as previously," Saunders said in his speech at the University of Strathclyde today. The problem is that with inflation over 2% and with QE ongoing and rates at 50bps – the implied rate hikes to get to 1.25% are 3 years from now. This too is the problem for the ECB. Compared to the FOMC which talks of steady hikes through 2019 – read Mester’s speech – the risk is on the upside for EUR and GBP rate moves. Or so the market acts accordingly as FX lags. The drop in gold and palladium prices overnight highlight the return of focus from geopolitics to policy and economics – we are back to inflation and growth, wages and debt as key drivers.
The breakdown of EUR this morning maybe the key to understanding the rest of the global macro story unwind with 1.2250 and 1.2209 important.
Provider
Track
TRACK.COM is an independent platform for investment research and market ideas. TRACK.COM research and analysis is used daily by hedge funds, proprietary trading desks, central banks and institutional asset managers to make investment decisions. These clients view Track.com as a trusted partner – our real-time research is thoughtful, well organized and right on target.
Robert Savage
Other Reports from Track
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.