EUR 8.40 For Business Accounts Only

The Morning Track lunacy-2

- The Morning Track – Lunacy by Bob Savage
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Over the full wolf blood moon and its eclipse, howling investors got more and less than they wanted. Eclipses bluntly remind us all of our prehistoric past when gods ate the moon and spit it out again, when myths were the best explanation for the present chaos. Stories are the template for future action. The China economic data for 4Q was the slowest growth pace since 1Q2009. The retail sales are near 18-year lows. Industrial production surprised to the upside but fixed investments stalled. Perhaps the most important headlines were about the US/China trade talks stuck on intellectual property issues. The net reaction of markets in Asia was positive but in Europe less so as the markets are in doubt of the veracity of the data and the power of the present stimulus overlayed against the fears of a breakdown in the trade talks. This puts this week and the craziness of the rally up in risk against the well-worn fears of US politics, US growth, UK Brexit, central bank policy mi
stakes – with the ECB and BOJ this week – and geopolitical problems highlighted at Davos; all of this makes risk-on less easy to believe. The rally up in the USD/CNY overnight highlights the doubt in play and the need to hold 6.88 over the next few weeks as critical for those that yearn for the simplicity of buying and holding risk assets.