EUR 8.90 For Business Accounts Only

The Morning Track slow-then-fast

- The Morning Track – Slow then Fast by Bob Savage
http://track.com/articles/the-morning-track-slow-then-fast/

When explaining how he went broke, Mark Twain supposedly said “slowly at first, then fast.” Today is a slow day but that doesn’t mean that the risk for loss is any less. The focus on the overnight data came from China property prices which fell from 9.7% y/y to 8.3% - highlighting the deflation from the PBOC tighter money and government restrictions. The question is whether that is a soft landing and if it has any bearing on the weaker retail sales and industrial production. Of course, this isn’t a market that cares. Equities are higher as the US/North Korea war remains one of words rather than bombs. The USD is slightly bid, with JPY and CHF and all safe-havens lower. Bonds are weaker but not in the carry trade with Portugal rallying on its upgrade to investment status. The moves overnight were slow and that means pay attention to the fast phase which most expect happens around the FOMC and BOJ meetings later in the week. The UN speech from Trump is his ch
ance to regain US credibility globally – and many are prone to give him the benefit of the doubt given there are few alternatives. This puts the US NAHB data and the ongoing political talk as key for the rest of the day with the FX markets focused on GBP and USD gain against the JPY. The barometer of JPY on a holiday should always be in question but it is the best we have in slow markets.