EUR 8.46 For Business Accounts Only

The Morning Track steady-2

- The Morning Track - Steady by Bob Savage
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Crisp and cold markets start the week with the economic data light and the geopolitical headlines mixed. The USD slips from 19-month highs. Oil is steady, emerging markets steady except for Turkey where industrial production was worse. On the positive for risk ledger - the Italian coalition government agreed on a new budget and expects EU approval to avoid disciplinary actions. On the negative – the US slams China trade policy and pushes for WTO reform. The present story for markets is about low volumes reflecting lower conviction. The forward story is one about fear that US divergence of growth in 2018 can’t sustain in 2019. The USD is the barometer for all this and more as it captures the investment flow plans and the carry game for the FOMC rate hike expectations. The USD reversal overnight is minor in technical terms but important for risk monitoring and the view of many is that we see 96.50 in the US dollar index before we see another run to 98. The FOMC meeting
this week maybe the event to see such volatility, perhaps we trade near both ahead and after it. Until then USD bulls are lonely and the candles are suggesting a range more than a blow-off top.