EUR 8.84 For Business Accounts Only

The Morning Track non-events-2

- The Morning Track – Non-Events by Bob Savage
http://track.com/articles/the-morning-track-non-events-2/

There are competing goals in central banking – one to do no harm – meaning not to move markets or surprise them much by their actions – and two, to use forward guidance to get to the first goal. The taper talk risk today dominates the markets.
There is one event left that matters – the ECB Draghi news conference and how he will manage to keep tapering expectations intact but make them sound dovish so as not to upset the markets or the recovery. Confidence games are all around the news today from the Australian jobs report which was as expected but showed a big jump again in full-time jobs. Still Australia has the third highest part-time job force in the OECD. That might explain the key-day reversal in AUD, which as been elliptical in its ascent post the RBA minutes and now looks vulnerable into RBA Debelle’s speeche tomorrow. Japan confidence is shaken – the Abe government is on the ropes – and the BOJ isn’t so sure they can deliver anytime soon. The Japan Trade Surplus makes obvious the power of FX and JPY weakness in the equation. The demand for money anywhere else in Japan is less certain. The Kuroda clock is ticking and he is unlikely to be the BOJ Governor that hikes rates. The UK retail sales
bounced a bit – not enough to change any equation on Brexit, BOE or growth. The EU C/A surplus and flows show that the EUR isn’t yet unpopular enough to make that FX story exciting though this is the point for Draghi as the EUR move from 1.05 to 1.15 does the tightening work for him. The EUR/USD relationship is the right focus for the day but its unlikely to spur enough sparks to matter to other markets. 1.1620 or 1.1410 – in between its noise – with 1.1470 pivot.