EUR 9.28 For Business Accounts Only

The Morning Track no-plan-b

- The Morning Track – No Plan B by Bob Savage
http://track.com/articles/the-morning-track-no-plan-b/

France found that Alain Juppe won’t be a plan B for the Republican Party today. The troubles of Fillon and Marine Le Pen with the courts increase the trust issues for voters and leave holes for choice on the right – making the outcome less certain. Le Pen remains leading in the polls for the first round at 27% compared to 24% for Macron and 19% for Fillon who vows to remain. The second round polls show Macron beating Le Pen 60% to 40%. The hope for stable growth in China is another problem overnight with the GDP target moving from 6.5-7.0% to around 6.5% - driving up demand for global bonds. CPI target holds 3% with total social finance growth target of 12% along with M2 - leaving PBOC with a bias to tighten rates. China used to be the Plan B for the US and Japan in controlling the excess belligerence from North Korea – but that seems to be unraveling as the hermit kingdom launches another ballistic missile today. This spooks risk in Asia but was fear was short-liv
ed into Europe. The real fear is about politics everywhere and its grating against positions into the ECB this week along with the US Friday jobs report. Until then expect that lack of alternatives matter in driving trading. The US rates set the tone Friday afternoon with a buy the rumor and sell the fact trade on Yellen all but confirming the March 15 rate hike. The story overnight is nothing changed except the confusion over the rest of the world’s politics. The key trading driver is first rates, then USD in judging the tone for risk. USD bid tone overnight maybe a signal for 103 risk by Friday.