EUR 8.50 For Business Accounts Only

The Morning Track twitchy

- The Morning Track – Twitchy by Bob Savage
http://track.com/articles/the-morning-track-twitchy/

Time flies like lightening while markets are walking if not crawling to the exit on risk – as what deadlines mean for markets varies. The mainstay of twitchiness is in the EUR which fell and then rallied on the day as politics meet rate differentials and defining safe-havens becomes complicated. For Catalan this means that Spain is proceeding with article 155 that suspends the Catalan government for its independence declaration. For China, the PBOC Zhou warning of a “Minsky Moment” sent the Hang Seng sharply lower as all equity markets feel the scaring of the 30th anniversary of Black Monday – when US shares fell 25% or more. For New Zealand, the coalition of NZ First, Labor and Greens set a new government with Jacinda Ardern at the helm and a new low for NZD. For the UK, as PM May prepares to talk further to EU summit, by stepping back to support EU Nationals in the UK post Brexit with an open letter. These stories mixed with a lot of other economic news from s
tronger Australian jobs, to weaker Japan imports (particularly of energy) to on the nose China data – stronger retail sales, IP offset weaker investment leaving GDP at 6.8% - but not at the whisper levels of 7% that some were betting on. The overall mood about equities is the biggest driver of markets – its lifting global bond markets fast, so FX is more a side-show with GBP hit on retail sales, SEK on jobs, NZD on the coalition, that leaves the EUR to battle with the JPY for safe-haven status as an alternative to the USD as it deals with its market fears that history rhymes. The EUR volatility over the London session is important with the risk for 1.1880 and 1.20 tests again returning as the short-term 21-day at 1.1797 sets the pivotal buying back from the 1.1760 base.