EUR 9.28 For Business Accounts Only

The Morning Track spring-2

- The Morning Track – Spring? by Bob Savage
http://track.com/articles/the-morning-track-spring-2/

The vernal equinox brings a holiday to Japan, focus on change in Europe with the French debate, broken brackets for US NCAA Basketball (with Duke and Villanova both out) and a lot of expectations for reform in Washington DC along with fears that the April Cherry blossoms are at risk. Slow starting Mondays and slower starting Springs are not surprising but they both share a later catch-up phase normally harbingers of dramatic moves. So with snow on the ground it’s hard to feel the need for sunscreen and allergy medicine. So too, its hard to get excited by volatility. News from overnight was also light – ECB Visco added to the hawkish arguments suggesting deflation risks have past, that the ECB could shorten the time between QE Exit and future rate hikes putting the Draghi forward guidance of “an extended period” into doubt – like jumping from winter to summer. The G20 communique was watered down to make no reference to fighting protectionism and dropping climat
e worries. The Tillerson/Xi meetings in China were barely discussed by markets even as the new Secretary of State used the phrase, “nonconflict, nonconfrontation, mutual respect and win-win cooperation” that the Chinese have been pushing for years to portray his meetings as constructive. Using the language of China leaves many Sino-watchers in the US nervous, while Beijing smiles that it can do business with the Trump team. Overall, slow starts turn into fast finishes and the host of Fed Speakers today and this week (total of 9) all will set the tone for whether the US/EU rate difference remains in sharp divergence or not with the EUR/USD still the key focus.