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Beware the one-handed economist. As we learned from FOMC Powell yesterday, the FOMC can be patient on one hand and nervous on the other with inflation data central to their pause in tightening along with financial conditions. The rally up in equities this week balances against the US CPI this morning. The role of oil bouncing with equities and the role of better US/China trade talks supports renewed global growth views and adds to the one-handed risks for today. Against this we have the US government shutdown, the weakness in retail sales and autos in China and Europe and the ongoing uncertainty from emerging markets. One has to respect the calendar in the week ahead and remember its Friday to get the full picture for why a one-handed market seems particularly scary today – with China growth data, US 4Q earnings a one-two punch risk. All that puts the stories from overnight into perspective with weaker Japan household spending, lower EcoWatchers survey, smaller C/A s
urplus, weaker Italian industrial production, weaker UK industrial production all pointing to trouble in 4Q that sets the momentum for 1Q and beyond. The risk barometer to watch isn’t the CNY – its expensive here – nor is it the EUR at 1.15 as the ECB looks as confused as the FOMC. Rather, the safe-haven story to respect should it start to move today or next week is JPY with 107.50 the pivot to watch for a return to flash crash 105 barriers.
The Morning Track one-handed
- The Morning Track – One-handed by Bob Savage/articles/the-morning-track-one-handed/
Beware the one-handed economist. As we learned from FOMC Powell yesterday, the FOMC can be patient on one hand and nervous on the other with inflation data central to their pause in tightening along with financial conditions. The rally up in equities this week balances against the US CPI this morning. The role of oil bouncing with equities and the role of better US/China trade talks supports renewed global growth views and adds to the one-handed risks for today. Against this we have the US government shutdown, the weakness in retail sales and autos in China and Europe and the ongoing uncertainty from emerging markets. One has to respect the calendar in the week ahead and remember its Friday to get the full picture for why a one-handed market seems particularly scary today – with China growth data, US 4Q earnings a one-two punch risk. All that puts the stories from overnight into perspective with weaker Japan household spending, lower EcoWatchers survey, smaller C/A s
urplus, weaker Italian industrial production, weaker UK industrial production all pointing to trouble in 4Q that sets the momentum for 1Q and beyond. The risk barometer to watch isn’t the CNY – its expensive here – nor is it the EUR at 1.15 as the ECB looks as confused as the FOMC. Rather, the safe-haven story to respect should it start to move today or next week is JPY with 107.50 the pivot to watch for a return to flash crash 105 barriers.
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