EUR 8.46 For Business Accounts Only

The Morning Track resolution

- The Morning Track – Resolution? by Bob Savage
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Event risks for the week are coming to a head. The UK Brexit saga is in the endgame, the Italy/EU budget clash has a deadline today, US/China trade hopes resume and the world gets a host of economic data again – most of it notably weaker and troubling for 2019 outlooks. Against this is the talking headlines that drive up some modicum of hope after a riotous sell-off in tech shares in the US yesterday. Markets are uneven and unsettled even with the talking hope – calling today a bounce back in risk would be an overstatement. Witness the ongoing downdraft in oil prices and the USD holding its gains.
• China/US talks resume – Liu to vist US ahead of Xi-Trump G20 meeting. The WSJ reports that a Friday call between Vice Premier Liu and US Treasury Mnuchin have both sides trying to reach accommodation.
• UK May sees Brexit talks “in the endgame.” Despite Johnson pushback and Labor pressure, FT reports UK PM sees Wednesday as a deadline.
• Abe/Pence talks lead to hope for expanding trade and investment flows along September agreement. They also agree on more North Korea sanctions.
• ECB Praet said the ECB plan for reinvestments of its QE will be communicated in December. Praet did his best to sound dovish but the EUR rallied and periphery bonds suffered after his speech.
The bellwether currency for risk confusions today is the GBP which has managed to shake off the weaker jobs report and focus entirely on the hope that UK Brexit deals bring back some value to the Pound. The 1.2770-1.3280 pennant formation suggests this is indeed a market coming to a head with the bear trend at 1.3770 holding for now and perhaps the bigger picture opportunity.