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EUR 8.40
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http://trackresearch.com/articles/the-morning-track-summer-stews/
The summer market continues with a bias towards clipping coupons and staying on the beach but the drinks are hot and the mixture unpalatable for the long-term. Some foods don’t mix with the weather, like a hot stew in a world filled with humidity. Price action over the last 24-hours is similar to eating such a summer stew. The drop in oil prices yesterday brings back the doubts about global growth, troubles with higher volatility and role of US production and policy. The Trump/Putin news conference set the Republican Party into a tizzy as the President cast doubt on the 2016 election interference by Russia. The trade war worries in China remain central and CNH trades to 6.72 while housing prices in China rise despite less easy money and more government regulations. The jump underscores issues for reigning in bubbles. Overnight data from New Zealand – particularly the RBNZ lifting its CPI sectoral factor model – lifted NZD to lead G10 winners over the USD. RBA retur
ned to talking about a hike next – though kept that as a long-term expectation – while the UK jobs report was good enough to keep the BOE August hike expectations high (over 90%). UK May won the vote on her Brexit plans but after excepting 4 amendments that may scuttle EU acceptance. Her conservative civil war continues. Italian industrial orders were also stronger making clear that politics haven’t hurt business there. Little news for the trading machines leaving carry, selling volatility and waiting it out as the alternatives to food disappointments. The alternatives to the USD and its risk corellation to equities is clearly in play again but the EUR and its stubborn holding over 1.17 maybe the one to watch today as the 1.1728 55-day is the pivot. As FOMC Powell and US industrial production are the next hurdles to eating a plain summer stew – expect rates to return as a key driver and the EUR to be the barometer.
The Morning Track summer-stews
- The Morning Track – Summer Stews by Bob Savagehttp://trackresearch.com/articles/the-morning-track-summer-stews/
The summer market continues with a bias towards clipping coupons and staying on the beach but the drinks are hot and the mixture unpalatable for the long-term. Some foods don’t mix with the weather, like a hot stew in a world filled with humidity. Price action over the last 24-hours is similar to eating such a summer stew. The drop in oil prices yesterday brings back the doubts about global growth, troubles with higher volatility and role of US production and policy. The Trump/Putin news conference set the Republican Party into a tizzy as the President cast doubt on the 2016 election interference by Russia. The trade war worries in China remain central and CNH trades to 6.72 while housing prices in China rise despite less easy money and more government regulations. The jump underscores issues for reigning in bubbles. Overnight data from New Zealand – particularly the RBNZ lifting its CPI sectoral factor model – lifted NZD to lead G10 winners over the USD. RBA retur
ned to talking about a hike next – though kept that as a long-term expectation – while the UK jobs report was good enough to keep the BOE August hike expectations high (over 90%). UK May won the vote on her Brexit plans but after excepting 4 amendments that may scuttle EU acceptance. Her conservative civil war continues. Italian industrial orders were also stronger making clear that politics haven’t hurt business there. Little news for the trading machines leaving carry, selling volatility and waiting it out as the alternatives to food disappointments. The alternatives to the USD and its risk corellation to equities is clearly in play again but the EUR and its stubborn holding over 1.17 maybe the one to watch today as the 1.1728 55-day is the pivot. As FOMC Powell and US industrial production are the next hurdles to eating a plain summer stew – expect rates to return as a key driver and the EUR to be the barometer.
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Robert Savage
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