EUR 9.12 For Business Accounts Only

The Morning Track no-shock-and-awe

- The Morning Track – No Shock and Awe by Bob Savage
http://track.com/articles/the-morning-track-no-shock-and-awe/

Fat Tuesday, the last day before Lent, and the party isn’t really that inspiring for markets. Perhaps there isn’t enough liquor or perhaps its just not lurid enough. There is a lack of shock and awe about the data and the political commentary today. Trump and his speech to Congress remains the highlight yet it comes after the closes with a gaggle of Fed speakers before him. The problem now that he is on TV with Fox and Friends and hasn’t talked about tax plans and infrastructure spending as most equity investors desire. One also must wonder if he “spends”, they hike thinking prevails for the FOMC – all of which puts a downward pressure on real growth hopes and longer-end rates. Note the curve flattening today. There were plenty of other things to note overnight but perhaps not to awe – and they balance out like the FOMC and Trump: The weaker Japan industrial production or the weaker French CPI (which is over 20% of the Eurozone total) both of which are bea
rish for the global inflation trade while against that we have China promising to spend CNY15trn on infrastructure in the next 5 years – more than Trump it seems. We also have Italian CPI higher than expected, we have the Swiss KoF economic barometer back to Dec 2013 highs, we have better Sweden GDP and retail sales and we have a Australian terms of trade in 4Q up over 9% - all of which is inspiring for growth hopes. This balancing act comes through with USD index clearly in play again with many wanting to ditch the uptrend hopes before the speech but others less certain. As Einstein said: “He who can no longer pause to wonder and stand rapt in awe, is as good as dead; his eyes are closed.”