EUR 9.18 For Business Accounts Only

The Morning Track tgif

- The Morning Track – TGIF by Bob Savage
/articles/the-morning-track-tgif/

The movements of everything can be explained. Whether those stories hold true with similar data into the future has yet to be proved. This is the curse of trading fundamentally without an eye also on technical price changes. Note that the two big stories overnight are the culprits for the modest rise in volatility for EUR/JPY and US bonds – with MUFG’s bid for Germany’s DZ Banks aviation arm E5.6bn deal announced March 1 being linked to the FX moves – while China M2 and total social finance shoots higher – about 9.5% of GDP of stimulus in new money – driving up global yields. The China trade data is more troubling with exports much higher and imports shrinking faster. Auto sales also lower suggesting new money hasn’t yet found the consumer in China. In Emerging Markets, its about SGD and the MAS on hold despite weaker GDP and lower forecasts versus the TRY breaking 5.80 and with CDS back towards its historic highs as CHP opposition claims the government is
pushing for a revote in Istanbul. In Commodities, its all about Oil and Libya as its oil chief warns fighting could wipe out all crude production. All you can say to these headlines is TGIF. All eyes are on the US bank earnings reports this morning, then the US consumer sentiment, then the talks at the IMF/World Bank meetings as many see the gloom about China turning and with it the easy money focus that left markets so happy in 1Q. Its Easter Week next and with it holidays and thinner markets. For FX markets, this maybe good news as the lack of volatility in EUR and JPY maybe reversed when no one is looking. Watching 124.90 base for 127.65 test now and with it risk-on trading in other asset classes. The earnings recession cycle is going to clash with