EUR 8.50 For Business Accounts Only

The Morning Track overload-3

- The Morning Track – Overload by Bob Savage
http://track.com/articles/the-morning-track-overload-3/

The return of economic data in Europe leaves a feeling of overload on market moods today – with the USD failing to gain despite expectations for more FOMC hikes, better 4Q growth and some hope for US tax deals – though many may want to argue that the Twitter battle of President Trump against US Senator Corker puts tax reform hopes at risk, the larger push of getting offshore corporate cash back home will prevail. The USD is soggy mostly because of strength elsewhere. The EUR is back to 1.18 thanks to stronger EU data and expectations that the ECB will have to act like the FOMC. The IMF meetings that start today are going to give markets plenty of speeches and backroom talks to get that message – global growth means global rate hikes. The GBP is better because UK May is ready to lead without a Brexit deal. The UK data also helps to inspire the November BOE rate hike expectations. The EM world is back as the threats from geopolitical fears are just not as important
as cash flows and yields – and the contagion fears from Turkey yesterday prove overblown today with KRW and CNY leading in Asia. For Japan, Abe seems set for a win, with the Party of Hope opposition slipping in the polls. Oil is back bid as Saudi plans to cut back its exports again and the markets are all about waiting for 3Q US earnings and the FOMC Minutes tomorrow before believing in anything new about US rates. This is the economic overload pause, which may be important to the bigger trend but could just be a simple consolidation before 4Q trends return with US assets outperforming despite the talk of this being overdone. For today, the USD is clearly the focus and the risk with 92.94 the pivotal support.