EUR 8.84 For Business Accounts Only

The Morning Track whitsuntide

- The Morning Track - Whitsuntide by Bob Savage
http://track.com/articles/the-morning-track-whitsuntide/

Numbers again and the search for wisdom. Today starts the holiday week for the Pentacost, the 50th day after Easter, a mixture of Christian festival, as the Holy Spirit descends upon the disciples bestowing wisdom, and of medieval vacation wrapped around Beltane and the celebration of mid-Spring. The movable feast leaves less food-for- thought today as markets are mostly risk-on, easily ignoring the fragility of events past and future from terror to votes. The London weekend terror attack, claimed by ISIS - has little market fallout but more geopolitical - as the UAE, Egypt and Saudi cut diplomatic ties with Qatar citing terrorism. Politics everywhere still matter. The State of Mexico yesterday voted back the ruling party PRI beating MORENA with a slim 33% to 31.2% - enough to flip MXN from 18.70 to 18.41. The PRI lost in Mayarit and was too close to call Coahuila. The lesson is that GBP faces the same focus and risks for Thursday with the UK election. Survation poll put
Conservatives at 40% and Labour at 39% - spooking markets. The Guardian ICM poll, however, is 45% for May’s Conservatives, 34% for Corbyn’s Labour, 8% LibDems, 5% UKIP and 3% Greens – little changed. Economic data from Service PMIs, for the UK, was weaker but for Europe and China and most of the rest of the world better. China lifts off 10-month lows, Japan at 40-month highs. Focus is still on growth as the driver of equities and risks, given expectations that little will change for monetary policy. So we play for Spring and hope rather than remain mired in the grim reality of geopolitics for now. For most, the measure of risk-on is JPY with a key test of the 200-day at 110.35 so far holding, but this is the rub – USD weakness helps until it doesn’t.