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The risk-on and risk-off barometer remains the USD and given that the US dollar index is up on the day and equity markets are mixed – it’s all about the US data and further political stories ahead. Many think the risk of Trump impeachment rose so risk should logically be lower but for the fact that its August and the real event will be if Republicans lose control of Congress in the November mid-terms. Today, markets are steeled for more political headlines but they aren’t just about Trump. The Australian leadership challenge grabbed early headlines overnight. The Senate there voted down a no confidence motion but FinMin Bishop is the now running for Liberal Party leader against Turnbull. The UK grabs some headlines as the government releases its “no-deal†Brexit contingency plans, but Raab remains upbeat. Of course, pain trade in EM today is Trump related with ZAR off 1% on tweet that the US will look into recent farm seizures, raising the risk that South Africa
could be the next victim of sanctions/tariffs. Land reform in South Africa remains unfinished and complicated business. The economic data today was the mainstay for the week and its mixed as well with Japan better, Europe overall better even as manufacturing stutters in Germany, it gains in France, and though overall export orders have smallest rise in 2-years, Services counterbalance. Confidence is waning there and it’s clear that Trump trade issues matter. The US/China talks are not expected to stop the start of $16bn in tariffs today but many still see NAFTA and a US/China deal into the mid-terms. This macro hope matters to how to play the rest of the day and week as there is clearly fear about the Trump/Fed relationship and the role of the USD in the entire mess. The lesson for investors is that politics matter and that Australia is a teachable moment. The downtrend in AUD since January as helped steady the economy against geopolitical headwinds from the US and C
hina but the politics opens another 0.72 test again.
The Morning Track politics-2
- The Morning Track - Politics by Bob Savage/articles/the-morning-track-politics-2/
The risk-on and risk-off barometer remains the USD and given that the US dollar index is up on the day and equity markets are mixed – it’s all about the US data and further political stories ahead. Many think the risk of Trump impeachment rose so risk should logically be lower but for the fact that its August and the real event will be if Republicans lose control of Congress in the November mid-terms. Today, markets are steeled for more political headlines but they aren’t just about Trump. The Australian leadership challenge grabbed early headlines overnight. The Senate there voted down a no confidence motion but FinMin Bishop is the now running for Liberal Party leader against Turnbull. The UK grabs some headlines as the government releases its “no-deal†Brexit contingency plans, but Raab remains upbeat. Of course, pain trade in EM today is Trump related with ZAR off 1% on tweet that the US will look into recent farm seizures, raising the risk that South Africa
could be the next victim of sanctions/tariffs. Land reform in South Africa remains unfinished and complicated business. The economic data today was the mainstay for the week and its mixed as well with Japan better, Europe overall better even as manufacturing stutters in Germany, it gains in France, and though overall export orders have smallest rise in 2-years, Services counterbalance. Confidence is waning there and it’s clear that Trump trade issues matter. The US/China talks are not expected to stop the start of $16bn in tariffs today but many still see NAFTA and a US/China deal into the mid-terms. This macro hope matters to how to play the rest of the day and week as there is clearly fear about the Trump/Fed relationship and the role of the USD in the entire mess. The lesson for investors is that politics matter and that Australia is a teachable moment. The downtrend in AUD since January as helped steady the economy against geopolitical headwinds from the US and C
hina but the politics opens another 0.72 test again.
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