EUR 8.70 For Business Accounts Only

The Morning Track internal-discussions

- The Morning Track – Internal Discussions by Bob Savage
http://trackresearch.com/articles/the-morning-track-internal-discussions/

What you think isn’t what you say. However, the internal discussion in your head drives the external actions of the day and what you do matters more than any talk. Fear versus Greed balances across markets in a slow start again with Trump and Kuroda dominating the news agenda – the US stock futures are bouncing, bonds lower - leaving many wondering if this is all another exercise in buying the “dip.” So far this strategy works but 2018 has provided less surety and more volatility around that idea. The US stock market drop yesterday was no joke but it failed to spark the same level of panic globally overnight. The FAANG stocks lost $78.7bn in market cap yesterday with Trump attacks on Amazon and Facebook still mired in the private data bog the main drivers. JPY had another choppy trading session as BOJ Governor Kuroda said the central bank was having internal discussions on how to exit from its massive monetary stimulus program, but kept up his view that nothing is
going to change for a long time. Trump talk that a NAFTA deal was likely within 2-weeks also helped change sentiment on trade war fears in Asia even as tech and chip shares fell. In fact, the overnight is about less fear and more about hope as the internal discussions look for opportunities in volatility. As for the other stories overnight, RBA on hold was a non-event but the PMI there surprised to the upside. European data was mostly weaker and leaves open the wait for more political clarity whether about Italy or about the Draghi replacement at the ECB – with a new front-runner being suggested – Finland’s Liikanen. All this puts the trading of FX in a back seat and lifts rates and stocks to the front. While most will obsess about the S&P500 and the 200-day break down, the clearer signal to watch is in US 10Y bond yields and the 55-day break at 2.797% holding still. This opens 2.62% tests for 100-day should US jobs and other data prove less than glorious.