EUR 9.38 For Business Accounts Only

The Morning Track holly-daze

- The Morning Track – Holly Daze by Bob Savage
http://track.com/articles/the-morning-track-holly-daze/

The focus is on the end of the week rather than the continuation of trend. We are seeing less liquidity, more volatility and less interest in general as the Holiday mood hangs over the US open. Markets have been all about US rates and USD with the rush to 118 JPY and 104 EUR the key story for many. The pause today isn’t taken as much more than that dazed feeling when you realize the punch is spiked. This is a market waiting for a break after another 1.2% gain in the US dollar index and another 10bps up in US 10Y yields for the week. Equities are watching one thing – DJ20K with the JPY the best barometer for that and 118.20 somehow correlated again as rates balance out equities again. The overnight focus was on politics and central banks – Russia stayed on hold, Draghi sounded dovish, BOC Poloz confused. No one is sure that the political stories won’t again surprise as Putin and Abe make friends and as China promises to make a military slingshot of its reclaimed
South China Sea Islands. The promises for keeping policy stable, jawboning banks not to lend to zombie SOEs and for enticing foreigners back to China investing – all seem hard to believe. This is the state we are in where holiday trading and doubt mix badly with the punch bowls of central bankers – particularly that of the Fed