Report
EUR 8.90
For Business Accounts Only
http://track.com/articles/the-morning-track-no-shelter/
The dollar is no shelter. The USD proved again not to be a safe-haven last night as the Region prepares for Hurricanes Irma, then Jose and Katia with an 8.0 earthquake in Mexico thrown in to make clear disasters can’t be modeled, but US bonds are another story. Nature is beating economics and politics and its not yet clear if markets will follow. The central bankers remain the referees and the ECB the focus – as ECB Liikanen sees December action and as Reuters reports on the meeting yesterday – there was “broad agreement that their next step will be reducing their bond purchases and discussed four options… cutting assets buys to E40bn a month or E20bn, with extension options including 6 months or 9 months.†The US FOMC isn’t far behind as the December rate hike fears unwind on US politics, FOMC staffing and hurricane damage expectations. The world has flipped from fearing US rate divergence to global rate normalization again. US bonds are breaking towards th
e magic 2% line with many now fearing 1.70% 10Y yields next rather than 2.30% breakouts. The safe-haven FX has been in China with the CNY leading yesterday and continuing today despite the PBOC fixing it lower than expected. China trade was weaker with exports – worst since February – while focus there is on Xi and his push for North Korea diplomacy now urging Macron to get involved. The Japan GDP was weaker as some feared due to Capex, while Australian finance was higher despite a drop in investor mortgages. The EU data was mixed with German exports weaker, French IP better, UK IP worse and UK trade slightly better – the weaker GBP reversed today. Markets are all keyed up about the US storms and FOMC policy debates while the USD drops further and faster than many expected. For now the USD and the UST are correlated – that wasn’t the case in most of the summer and it may not last if we break the November 1.99% 10Y lows.
The Morning Track no-shelter
- The Morning Track – No Shelter by Bob Savagehttp://track.com/articles/the-morning-track-no-shelter/
The dollar is no shelter. The USD proved again not to be a safe-haven last night as the Region prepares for Hurricanes Irma, then Jose and Katia with an 8.0 earthquake in Mexico thrown in to make clear disasters can’t be modeled, but US bonds are another story. Nature is beating economics and politics and its not yet clear if markets will follow. The central bankers remain the referees and the ECB the focus – as ECB Liikanen sees December action and as Reuters reports on the meeting yesterday – there was “broad agreement that their next step will be reducing their bond purchases and discussed four options… cutting assets buys to E40bn a month or E20bn, with extension options including 6 months or 9 months.†The US FOMC isn’t far behind as the December rate hike fears unwind on US politics, FOMC staffing and hurricane damage expectations. The world has flipped from fearing US rate divergence to global rate normalization again. US bonds are breaking towards th
e magic 2% line with many now fearing 1.70% 10Y yields next rather than 2.30% breakouts. The safe-haven FX has been in China with the CNY leading yesterday and continuing today despite the PBOC fixing it lower than expected. China trade was weaker with exports – worst since February – while focus there is on Xi and his push for North Korea diplomacy now urging Macron to get involved. The Japan GDP was weaker as some feared due to Capex, while Australian finance was higher despite a drop in investor mortgages. The EU data was mixed with German exports weaker, French IP better, UK IP worse and UK trade slightly better – the weaker GBP reversed today. Markets are all keyed up about the US storms and FOMC policy debates while the USD drops further and faster than many expected. For now the USD and the UST are correlated – that wasn’t the case in most of the summer and it may not last if we break the November 1.99% 10Y lows.
Provider
Track
TRACK.COM is an independent platform for investment research and market ideas. TRACK.COM research and analysis is used daily by hedge funds, proprietary trading desks, central banks and institutional asset managers to make investment decisions. These clients view Track.com as a trusted partner – our real-time research is thoughtful, well organized and right on target.
Robert Savage
Other Reports from Track
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.