EUR 9.24 For Business Accounts Only

The Morning Track pics

- The Morning Track - Pics by Bob Savage
http://track.com/articles/the-morning-track-pics/

Europe opened ready for a larger US dollar reversal, the CNY and CNH moves drove the markets in Asia and many were prepared for the same in London. That didn’t happen and so we are onto the slang of the day – show us the pics. Show the proof of the USD weakness or stop the story and start over. We were all prepared and trained from years of QE to buy the dip and never doubt the trend led by central bankers. Now we have to follow politicians and the VP Pence bravado of passing tax reform by Spring maybe enough to make this USD correction nothing but a bad night. The FOMC said they want pics on this before changing gradual to mean 1 hike a year. The balance in FX is either a much weaker US story – something that the FOMC minutes didn’t provide – or a much stronger global story – and the better Caixin PMI, better Eurozone retail sales aren’t enough to do the trick. For now we are all USD traders with CNH the key reversal that has little to do with the FOMC or
ECB or US 10Y bonds touching 2.40% and much more to do with HIBOR and overnight squeezes orchestrated by Chinese authorities to punish those that doubt their will to control capital outflows. The net result is that today is about the way things really trade – and if we can get a bigger reversal. For the world in FX that is the EUR/USD and its 1.0650 that matters.