EUR 8.50 For Business Accounts Only

The Morning Track short-lists

- The Morning Track – Short Lists by Bob Savage
http://track.com/articles/the-morning-track-short-lists/

While most seem content to wait, the Trump short-list for the FOMC Chair has sparked a rally back in the global bond market and a notable USD retreat as the fate of Warsh or Powell or Cohn still stays in the orange hair zone. While that isn’t news or even politics of the traditional sort, it’s the best markets have ahead of the US ADP report. The noise of the hurricanes hangs over the data, as was shown yesterday with September vehicle sales. Overnight, the focus was more on price than on economic data as Europe is obsessed with the Catalan story with EU refusing to step in and Spain seemingly on the brink of a bigger breakdown. Spanish bonds and stocks are lower and that has hit Italy as well. The speeches from ECB Draghi and Fed Chair Yellen latter today may shift focus back to policy but the data and other central banks just didn’t matter that much – with global Service PMI reports mostly lower than expected in Asia and in Europe; with Eurozone retail sales
weaker in August and with RBI meeting in India resulting in no change from 6% rates as expected but cut bond holding ratio by 50bps to 19.5%. The focus on price action overnight in the USD and rate retreat maybe just the usual jitters in front of the ADP and Yellen headlines, or it could be more – calling this a “normal” correction seems logical – but a guess until you hear from the Fed and see the data. Data dependency inherently increases volatility and that is something that many are not used to living with in a world of the VIX under 10% and with ranges across many markets tighter than average. The USD maybe the best vantage point to pick up on new volatility – with 94 or 92.95 key for any acceleration. The short list for the market is to keep on buying dips whether that is USD at 93.10-20 or US rates at 2.28%.