EUR 9.12 For Business Accounts Only

The Morning Track mistakes

- The Morning Track – Mistakes by Bob Savage
http://track.com/articles/the-morning-track-mistakes/

When you think you have won but then hear it’s a mistake – like the Oscars for best picture being “Moonlight” not “La La Land” – there will be confusion and the natural 5 stages of grief. Perhaps we will see all of those for markets this week. Some say mistakes are happy accidents – witness the explosion of interest in the OSCARS today - others say they are opportunities, but the emotional tearing of the expected remains painful and for markets that means trouble. Logic doesn’t usually follow mistakes – so correlations today aren’t following either – with both Asian equities and USD lower, even as US bonds stopped rallying today – after touching near their key 2.28% 10Y yield resistance. Blame the Oscar SNAFU or blame the fact that nothing much happened over the weekend and its now month-end trading that matters. The big loser was GBP with the UK May government preparing for another Scottish independence referendum. The big winner is oil today up
again with $55 in its sights. Second place goes to French and periphery bond markets as Macro sees further gains in polls over the weekend and Renzi relents and admits 2018 elections most likely unless Gentiloni calls for earlier. All of this leads to the inevitable return of political power beating economic reality. The GBP moves last week have been reversed again in thin Asian trading markets with the risk for 1.2160 and lower returning. The implications are that the week ahead is going to be full of reversal risks in JPY, EUR and CAD given the news agenda.