EUR 8.70 For Business Accounts Only

The Morning Track overload-4

- The Morning Track – Overload by Bob Savage
http://trackresearch.com/articles/the-morning-track-overload-4/

The death of Stephen Hawking at 76 reminds us all that we aren’t yet at singularity where the brain can beat the body and that we owe a debt to all those like him that push the thoughts and ideas that make for a bigger and maybe better world. Economic data releases dominated the headlines overnight leaving a clear trail of evidence for further coordinated, global growth. The most important parts of the news from overnight – China industrial production and investment beat forecasts and make 6.5% y/y GDP look easy. The NBS noted urban unemployment was below 5% leaving some room for more financial reform. Japan core machinery orders make clear Capex is alive and well in Asia. The Eurozone had better Spanish retail sales, weaker IP and better jobs. As for policy, the Japan BOJ minutes reveal something that ECB Draghi is also discussing – how the backward looking factors on the economy are lessening their drag and lose out to the forward looking ones that lift up inflation
expectations - this flip looks important – as it means changing policy before CPI targets are met. As for politics, the US Pennsylvania Congressional race is too close to call and this matters since Trump put effort into the race and won that district by 20 points in November 2016. His washout of the globalists from his Cabinet is expected to continue and remains a key focus for US markets with the threat of serious China tariffs to follow. The problem for today is that Asia is scared, Europe not bothered and the US remains the tie-breaker for mood swings. The US CPI and Wages were taken yesterday as confirmation of Goldilocks policy remaining but the stock markets fell on Trump replacing Tillerson at Secretary of State. Today has retail sales and PPI – and more political worry – leaving the focus back on risk barometers. A dovish sounding Draghi helped but maybe not sufficient. The EUR isn’t flashing red or green but yellow – and that puts 1.2340 as a key le
vel to watch today for the bears and 1.2550 needed to break for the bulls.