Report
EUR 9.06
For Business Accounts Only
http://track.com/articles/the-morning-track-visitors/
Happy New Lunar Year or Kung Hei Fat Choy. We welcome in the Fire Rooster and shuffle out the Wood Monkey. Remember appearances matter along with diligence and hard work. How one enters matters to how you are treated as a guest. The revolving door of time is like that of Politics, which seems to matter evermore than economics to markets these days. Trump hosts May today. The UK Prime Minister will be in Washington discussing Brexit and US bilateral trade after her speech yesterday to Republicans in Philadelphia. There will be other visitors to the US today – but the ease and greeting on their entry will be different as the Trump Administration delivered more orders on immigration and the building of the wall. The floating of a 20% border tax to pay for the wall was the way overnight markets started. The way it will end today remains one about how all politics drive growth with the 4Q GDP report the baseline for the new President to attempt to break out of the 4% n
ominal ceiling. The key point about markets today is in the mix of expectations about how a 20% border tax plays out onto the consumer and inflation. If companies merely pass on costs, the nominal GDP in the US could be much higher and the average worker much unhappier unless they get a pay raise – all of which means we want to see real growth and the “right†kind of inflation to sustain the present mix of a bid USD, a soft US bond market and a robust equity market. Of course, all this is long term and something larger happened overnight, as the big visitor to markets was the BOJ in the 5-10Y buying zone which drove USD/JPY over 115 and made clear that the BOJ is intent on keeping rates near 0% in 10Y and not allowing the crawl that Europe has suffered in rates to go unchecked. This puts EUR/JPY clearly into play and makes the barometer of USD/JPY and risk more in line with the “carry trade†story returning to all markets, not just FX. On the day a close over
115.60 may be the signal that drives month-end and the start of February into overdrive for buying rather than selling risk.
The Morning Track visitors
- The Morning Track – Visitors by Bob Savagehttp://track.com/articles/the-morning-track-visitors/
Happy New Lunar Year or Kung Hei Fat Choy. We welcome in the Fire Rooster and shuffle out the Wood Monkey. Remember appearances matter along with diligence and hard work. How one enters matters to how you are treated as a guest. The revolving door of time is like that of Politics, which seems to matter evermore than economics to markets these days. Trump hosts May today. The UK Prime Minister will be in Washington discussing Brexit and US bilateral trade after her speech yesterday to Republicans in Philadelphia. There will be other visitors to the US today – but the ease and greeting on their entry will be different as the Trump Administration delivered more orders on immigration and the building of the wall. The floating of a 20% border tax to pay for the wall was the way overnight markets started. The way it will end today remains one about how all politics drive growth with the 4Q GDP report the baseline for the new President to attempt to break out of the 4% n
ominal ceiling. The key point about markets today is in the mix of expectations about how a 20% border tax plays out onto the consumer and inflation. If companies merely pass on costs, the nominal GDP in the US could be much higher and the average worker much unhappier unless they get a pay raise – all of which means we want to see real growth and the “right†kind of inflation to sustain the present mix of a bid USD, a soft US bond market and a robust equity market. Of course, all this is long term and something larger happened overnight, as the big visitor to markets was the BOJ in the 5-10Y buying zone which drove USD/JPY over 115 and made clear that the BOJ is intent on keeping rates near 0% in 10Y and not allowing the crawl that Europe has suffered in rates to go unchecked. This puts EUR/JPY clearly into play and makes the barometer of USD/JPY and risk more in line with the “carry trade†story returning to all markets, not just FX. On the day a close over
115.60 may be the signal that drives month-end and the start of February into overdrive for buying rather than selling risk.
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Track
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Robert Savage
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