EUR 8.70 For Business Accounts Only

The Morning Track scraps

- The Morning Track - Scraps by Bob Savage
http://trackresearch.com/articles/the-morning-track-scraps/

In order to have a full reversal of mood, markets will need to be fed something positive – some morsel from central bankers about easy money, or some further evidence that global coordinated growth can happen without inflation, or more precisely, corporate earnings can remain over 10% unfettered by wages or other costs (like taxes) eating into margins. Overnight, markets timidly embraced the risk-on mood, but there were table scraps for news and none of it supported easy money views, that leaves some of the safe-havens still in vogue like Gold and JPY while bonds and equities look for a balancing level.
• BoE Haldane no rush to hike aggressively – He said in an interview on Sunday that there was no rush to raise interest rates to levels seen in the past and that any tightening would not be aggressive. Markets attention though remains on May for next possible rate hike.
• ECB Nowotny sees rate hikes needed – He said in an interview on Sunday complained about US putting 'political influence' on the Dollar and that interest rate hikes will be needed in the foreseeable future but emphasizes sequencing with QE.
• BOJ Kuroda set for re-appointment for 2nd term as Governor by Abe. According to the WSJ, one adviser to Mr. Abe said the stock slides were the “conclusive factor” leading the prime minister to opt for continuity. If parliament approves the renomination, Mr. Kuroda would be the first BOJ governor to receive a second term since Masamichi Yamagiwa was reappointed in 1961. He served until 1964. The Japanese news agency Kyodo and other Japanese media earlier reported Mr. Abe’s decision.
• Trump budget looks for $3trn in cuts over next 10-years. Monday's 2019 budget could again propose large cuts in domestic spending, an even larger boost in military spending and a balanced budget. Markets see Trump’s budget proposal seen as risking higher fiscal deficits; while Budget Director Mick Mulvaney says interest rates may spike on this.
• UK May prepares for week-long speech-a-thon with cabinet on Brexit. Government’s Brexit push starts with Foreign Secretary Boris Johnson giving a speech on Wednesday, followed later in the week by speeches from Brexit Secretary David Davis, Trade Secretary Liam Fox, and Cabinet Office Minister David Lidington ahead of May’s address Saturday in Munich.
If you have to trade today – and many are waiting it out rather than rushing in – given the holiday schedule of Mardi Gras, China New Year and school holiday schedules – watch the bond market against the stock market. There is a level where higher US rates matter to moods and where it lifts the USD back bid – some see it at 3.04% the Jan 2, 2014 highs, others are watching 2.912% the Jan 15, 2014 highs.