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http://trackresearch.com/articles/the-morning-track-less-isnt-more/
Brevity is the soul of wit but not of trading. Less fear, more risk – that is the usual trade strategy for Wednesday, but today Less isn’t More. Headlines are mixed. Less from Trump on China trade wars and more on oil sanctions and Iran. Less for NZD with Business Confidence lower but more trade exports lifting the surplus higher. More from China as the CNY weakens from 6.55 to 6.6150 but finds a cap. This alleviated some fears that the PBOC would allow even more CNY depreciation to battle a slowing economy and offset US trade war concerns. The PBOC cut its relending rate for SMCs by 0.5% another sign of “structural loosening†in policy after the Monday RRR cut. CNY is off 3% on the month but 1.4% on the year with regional Emerging Market FX much worse INR, PHP, IDR – all off over 4%. From a technical viewpoint, CNH is watching 100-week moving average resistance at 6.6534 and the Dec 12 highs at 6.6325 for further upside momentum tests with 6.5366 the June 26 low
s first USD support. More from Europe as the ECB sees M3 rise and as the EU summit leaves immigration as an issue with Italy at odds with others. The Brexit discussions leave GBP cold and Carney gives it a shove by sounding dovish. The Czech central bank raised 25bps to 1% today – driving a small rally back in CZK but the move wasn’t a complete surprise and the pain trade in EM isn’t going away today thanks to CNY. The BOE hits out at post Brexit plans in Brussels. Markets are bid for equities and bonds in Europe as the world has decided less isn’t more as global growth doubts rise and inflation fears drop. We are not in a Goldilocks fairy tale yet but the urge to buy the dip and fade the fear is on the rise when it comes to trade and Trump. This leaves the risk back to oil and US treasuries as the FOMC isn’t the ECB or the PBOC.
The Morning Track less-isnt-more
- The Morning Track - Less isn't More by Bob Savagehttp://trackresearch.com/articles/the-morning-track-less-isnt-more/
Brevity is the soul of wit but not of trading. Less fear, more risk – that is the usual trade strategy for Wednesday, but today Less isn’t More. Headlines are mixed. Less from Trump on China trade wars and more on oil sanctions and Iran. Less for NZD with Business Confidence lower but more trade exports lifting the surplus higher. More from China as the CNY weakens from 6.55 to 6.6150 but finds a cap. This alleviated some fears that the PBOC would allow even more CNY depreciation to battle a slowing economy and offset US trade war concerns. The PBOC cut its relending rate for SMCs by 0.5% another sign of “structural loosening†in policy after the Monday RRR cut. CNY is off 3% on the month but 1.4% on the year with regional Emerging Market FX much worse INR, PHP, IDR – all off over 4%. From a technical viewpoint, CNH is watching 100-week moving average resistance at 6.6534 and the Dec 12 highs at 6.6325 for further upside momentum tests with 6.5366 the June 26 low
s first USD support. More from Europe as the ECB sees M3 rise and as the EU summit leaves immigration as an issue with Italy at odds with others. The Brexit discussions leave GBP cold and Carney gives it a shove by sounding dovish. The Czech central bank raised 25bps to 1% today – driving a small rally back in CZK but the move wasn’t a complete surprise and the pain trade in EM isn’t going away today thanks to CNY. The BOE hits out at post Brexit plans in Brussels. Markets are bid for equities and bonds in Europe as the world has decided less isn’t more as global growth doubts rise and inflation fears drop. We are not in a Goldilocks fairy tale yet but the urge to buy the dip and fade the fear is on the rise when it comes to trade and Trump. This leaves the risk back to oil and US treasuries as the FOMC isn’t the ECB or the PBOC.
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Robert Savage
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