EUR 8.40 For Business Accounts Only

The Morning Track waiting-for-snow-2

- The Morning Track – Waiting for Snow by Bob Savage
http://trackresearch.com/articles/the-morning-track-waiting-for-snow-2/

The markets appear to be holding for the US GDP release and more earnings reports. The shock of Facebook and the contrast to Amazon may be the stand out stories for markets in the US this week but the macro world waits for US growth and compares it to the US Trump talk against the fears of one-off trade gains in anticipation of tariff pain later. This is a world waiting for bad news and the risk reward to trading is complicated by that with the focus squarely on the USD after the ECB Mario Draghi relative upbeat message about growth and policy shifts ahead was ignored. Overnight the main story and big focus was about the BOJ as it again offered to buy 10-year bonds at a fixed rate – this time it was 0.10% and not like Monday 0.11%. From this action more speculation starts about next week’s BOJ meeting and the rising expectation of some shift in policy there as the bond buying game and steepening of the curve policy clash. There is also the annoying reality that inflat
ion is far below target and won’t reach 2% anytime soon. The JPY stood out overnight in its gains in Asia even in the face of the BOJ action and in a relative bid equity market. The risk barometers for macro remain confused and correlations everywhere a mess from copper to gold to CHF. The waiting game may be less fun than usual because even after 8.31am an the noise of US GDP, there will be earnings and more thinking about next week and month-end and the central bankers. For now, we are all USD traders, watching to see if there is a breakout on good news or a return to range on bad.