EUR 8.50 For Business Accounts Only

The Morning Track refreshing

- The Morning Track – Refreshing by Bob Savage
http://track.com/articles/the-morning-track-refreshing/

The USD is looking for the powder room. This is the first downdraft in 3 days. The rate spreads aren’t sufficient today to keep the rally holding, leaving growth and politics to sop up the excess confidence and the markets are soggy accordingly. In China, the Xi succession plan speculation drives as the 19th Party Congress ends – as no one sees Xi leaving before 2027. In the US the fact that Trump is “very, very close” to announcing his nominee to head the Fed didn’t matter. The geopolitical worries are taking a backseat today – even with US Tillerson urging the Kurds/Iraqis to resolve their conflict, even with US/Japan/South Korea running missile drills, with New Zealand Ardern calling capitalism a dismal failure – urging RBNZ reform, higher minimum wages, and with the far-right in talks for coalition building in Austria. Markets can ignore all of this as growth matters more today thanks to the flash PMI reports. The better French reports and the stable Ger
man ones leave it clear that the ECB can talk about tapering and eventually hiking in the year ahead. This puts the focus back to the US side of the equation to change the mood. However, the US data agenda is light today leaving what happens later in the week more important and interesting and allowing the world to refresh with a cold drink and a bit of think about the recent torrid rate and USD moves.