EUR 9.24 For Business Accounts Only

The Morning Track ice-fishing

- The Morning Track - Ice-Fishing by Bob Savage
http://track.com/articles/the-morning-track-ice-fishing/

The winter sport for some is drilling a hole in the ice sticking bait on a line and dropping it to the bottom. This isn’t like skiing at all, there is no speed but they share a painful cold. We are all freezing in markets waiting for the clear signal of life beyond the correction in trend that started after Christmas and hasn’t changed since. The hope today is that some other cue beyond a tweet or talk from a political leader will lift markets either to bounce back to trend or breakdown into reversal territory. Some see ice-fishing as purgatory for those days spent in the summer swearing about the heat – which reminds me that world will end in ice just ask Robert Frost – forget global warming. Overnight the key driver was the speech from San Fran Fed Williams as it managed to lift US rates just enough to keep the USD bid back and so we see equities mixed to lower, bonds lower, commodities lower. In general confused with the US data on CPI, Industrial Production
, the FOMC Yellen Speech and Fed Beige Book up next – all likely enough to thaw out markets from their frozen lake of positions.

The USD longs have been caught like a hungry fish with the exuberance of the election dashed by the reality of mixed messages. The Davos meetings continue to be the backdrop of doomsaying where political fears become reasons to stay fishing for anything different. Policy decisions from BOC and ECB this week will matter in the context of voters and adding to the present mood. Too hawkish a sound may further dampen the dollar trend, too dovish and the FX markets may dominate again. We maybe best served to watch the EUR today as it maybe in second place in the race to the bottom with the JPY but it has the most potential to break the line. Watching 1.0550 for those that want to fish.