EUR 8.70 For Business Accounts Only

The Morning Track ghost-ships

- The Morning Track - Ghost Ships by Bob Savage
http://trackresearch.com/articles/the-morning-track-ghost-ships/

The term “ghost ships” is on the rise, as the Japan coast guard reports a sharp increase in the number of North Korean shipping vessels found adrift off its coast. The question to ask is whether they are spies, refugees or something else and perhaps most importantly if this is a signal that something big is changing in North Korea.

For markets today, maybe ghost ships are analogy to start the day as many see the headlines adrift from the prices and price action more troubling than usual with volatility rising sharply even as ranges hold. First is bitcoin up another 5.5% to $15,285 – new record highs ahead of the Sunday Futures launch and despite another hack attack on NiceHash wallets. The motor of analyzing risks from data appears to be stalling. This might be a trick of seasonal profit-taking and risk reduction – a subterfuge of illiquidity or it could be the signal that the era of low volatility, low yields is ending. After today’s weak UK Gilt auction its worth questioning as many now argue, UK rates are going up despite the outcome of Brexit. According to the UK Telegraph, EU Juncker now fears that the UK May government could collapse if Brexit talks are deadlocked, and so, they are prepared to extend deadlines. Michel Barnier was quoted as saying last night however, the UK had only 48 hours
to come up with an offer. The news from the IMF on China was mostly ignored, but the drop in coal demand hurts the AUD and its trade surplus shrinking is going to leave many wondering if playing China risk is back in vogue. The German IP data didn’t help steady bonds there as the weaker auctions, more equity stability puts value doubts in play. The world is filled with trades adrift and the data today seems unlikely to decisively answer the questions about the next trend. Given the risk-on and risk-off moods swings, the best barometer in FX maybe the EUR as the stops at 1.1764 attract given the 55-day support. USD gains without bigger rate moves are like seeing a ghost – ephemeral and not lasting.