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The Morning Track number-9

- The Morning Track - Number 9? by Bob Savage
http://track.com/articles/the-morning-track-number-9/

Apple and Bitcoin are dominating the financial headlines rather than the USD and North Korea. This is micro beating macro – though there are some mathematical questions like what happened to 9 – is it lost in the Beatles’ White Album - and why does Dimon get to call Bitcoin a ponzi scheme rather than the SEC. That doesn’t mean that macro is dead but rather that risk moods have stabilized and we are all waiting for more inflation data and the central bankers to talk us through how to react to data. Overnight, geopolitics didn’t matter - North Korea’s Foreign Ministry says it “condemns in the strongest terms and categorically rejects” the United Nations adding more sanctions while US Treasury Mnuchin threatens more sanctions on China over North Korea and Trump calls them a “small step.” Asia markets continued with risk-on moods with USD lower, equities higher. Europe saw a significant bond supply easily absorbed – in stark contrast to the US 10Y sale y
esterday – but that wasn’t the driver this morning either. Even with unemployment at 42-year lows, wages in UK aren’t higher – leaving the BOE decision tomorrow more difficult to call. CPI was up, but not the right parts and so GBP retreats a bit from 1.3329 fresh highs with 1.3250-1.3430 the trading focus now into the BOE. The SEK also had a bad day reversing some of yesterday’s CPI gains as GDP was revised down. Lesson from the overnight – economic data still matters and how central bankers react matters even more. Witness today’s RBA Harper comment that the economic growth is just too weak to justify a rate hike. All of this makes today a bit more plain with the hint of conspiracy driving the tug of inflation fears against the constant of growth and geopolitics – with the barometers for risk-moods no longer bonds or JPY but something else – perhaps gold which maybe finished with the correction and looking for a close above $1342 to confirm another s
hot to $1375 or more likely its oil as Brent charges toward $55 bbl and WTI breaks $48.63 overnight with risk of $51 despite the US storms and all the other talk of 3Q GDP missing the mark.