EUR 8.50 For Business Accounts Only

The Morning Track motives

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

There isn’t much different today than yesterday. The motive to trade in a market starts with your cash and positions and that might just be the key for understanding the overnight price action as bonds continue to sell off and equities rally. The USD is in a holding pattern and the oil markets are continuing to drip lower. Overnight news was light – focus remains on yesterday’s horror from Las Vegas and the motives of the shooter; in Europe focus remains on Catalan and the move to independence with EU now the peacemaker. In Asia, the China holiday continued, but RBA decided to remain unchanged and left its language much the same – adding to AUD doubts. In Japan Abe remains the likely winner in the upcoming election, not because of growing popularity but disarray from the opposition to get on the ballot. Even 4-year highs in consumer confidence in Japan doesn’t translate into higher CPI expectations. Markets are in that uncomfortable place not quite in trend o
r reverting to the mean but waiting with the German Unification Day holiday leaving volume light in the EU session. All of which makes the path for trading today more about one’s motive – do you want to grow wealth or sustain it? The risk rewards are all about the noise of the ranges overwhelming any new trend. The bond market moves from last week are still the front-runner for any shift away from reflation themes. Either the 10Y breaks 2.40% yield soon or dips below support at 2.28% - being stuck in between means more waiting.