EUR 9.06 For Business Accounts Only

The Morning Track small-tell

- The Morning Track – Small Tell by Bob Savage
http://track.com/articles/the-morning-track-small-tell/

In the big poker game of markets, the price action is usually the clear “tell” that the data or news has a good hand. We all watch the size of the bets to the size of the moves. But this is a day where markets are on edge as the price action isn’t as obvious a tell as usual. Many are complaining about curbed enthusiasm and subdued reactions to even more political announcements – whether clear polls showing Le Pen losing in a run-off or Trump barely getting his Education Secretary past the Senate. The two stories that seem to have the most surprise – the oil inventory report from API late yesterday afternoon with a crude build in the US of 14.2mb on the week and the RBI not cutting rates and instead moving to a neutral stance from an accommodative one. Both are more fundamental and old school economic than new world Trump. These leave Oil lower and INR stronger – logical from a macro perspective, but difficult for many other markets. The fear factors in Eu
rope are on the rise with EUR/CHF at 7-month lows 1.0636 back to “Brexit” lows. This move reflects more doubts about Europe than the other price action suggests – leaving EUR in play for 1.05 rather than 1.08 breakouts. The talk of more capital curbs in China puts Bitcoin off 1.3% - adding to larger Emerging Market concerns and at odds with the copper surge up 1.6% thanks to BHP mining strike and Freeport output cuts. Gold also is higher despite lower US bond yields and a stronger USD. This is a mess for machine signals and a goulash for macro discretionary thinking not to mention poker players. If you want to play in such a game – watch Oil at $51.40 for a break post EIA report today – as the main precept for FX and Bonds has been oil induced inflation – driven by the bounce from last year’s sub-$30 bbl price. A break of $50 in oil would change thinking more broadly.