EUR 8.14 For Business Accounts Only

The Morning Track tension

- The Morning Track - Tension by Bob Savage
http://trackresearch.com/articles/the-morning-track-tension/

If you have trading amnesia and want to remember where you are and who you are just by looking at markets today, it’s unlikely much will spark your memory. Friday and Monday have become same ends of a frayed rope, though the tension in trading still matters. Oil is higher at 4-year highs, USD bid recovering from Asia after weaker German orders and Swiss CPI; EU Bonds are bid with safe-haven status, but CHF is weaker, and JPY weaker even as geopolitical tensions dominated a light market start to the week with the UK celebrating a hot Spring banking holiday. The focus of news in Asia was that Iranian President Rouhani warned of repercussions if the US pulls out of the nuclear accord. The UK remains in the center of doubt with the BOE widely expected to cut its forecasts on growth and inflation and to push out any rate hikes into 2019. The UK Brexit issue also nags with PM May risking a rebellion over the customs plan. China and US trade continue to hang over markets as wel
l – even as many see further talks and a resolution over time – how long it takes matters and the canceling of soybean orders from the US highlights the risks. Not all the geopolitical stories were ugly. The leader of Italy's anti-establishment 5-Star Movement, Luigi Di Maio, on Sunday made a last-ditch offer to the far-right League in a bid to break a political deadlock. Di Maio said he would pick a prime minister with League leader Matteo Salvini. Until now, Di Maio has insisted that he be the next premier. What this means for remembering a bigger trend – if there is such a thing in 2018 – is found in FX as the inability to end the USD uptrend in JPY stands out. Watching 108.55-109.55 today (and perhaps this week) for something to change. Perhaps then markets will recognize that they are bullish or bearish and not just caught in a EM, oil and USD haze.