EUR 9.28 For Business Accounts Only

The Morning Track tomb-sweeping

- The Morning Track – Tomb Sweeping by Bob Savage
http://track.com/articles/the-morning-track-tomb-sweeping/

Bring out the green dumplings, time to pray to the ancestors and ward off evil spirits with willow branches after you sweep the tombs. This is the start of a new month and new hope that the old trends for risky assets continue – bonds up, stocks up and, yes, even now the USD up. The biggest risk positions are in Emerging Markets and they look a bit green too – with ZAR again under pressure at the Zuma political games close in with risks for a vote of no-confidence. Politics are the headlines everywhere still with Trump/Xi the dominate focus for the week ahead and with Trump locked in on North Korea according to the FT just as Xi calls for another economic zone. The UK is sabre-rattling over Gibraltar while the Spanish want everyone to calm down. Those headlines nicely obscure that growing world manufacturing confidence into 2Q with PMIs up just about everywhere. Growth in demand has led to inflation and yet that is the key for understanding the price action today
as ECB speakers were less hawkish and more supportive for accommodation. So we are all waiting for more information – a New York Fed Dudley redux on his FOMC 2 hike forecast and data dependence. We are also waiting for more on the US ISM with jobs, inflation and outlooks all key post the March stutter to the Trump reform agenda. This is time to pay respects to calendars and embrace the Spring. It’s also time to look at the charts and wonder if bonds are telling us something more than just the ECB patience. The 2.25% 10Y yields seems far away now but given the host of data in the week ahead perhaps we see something more than political noise or a tight 2.35-2.45% range trade.