EUR 23.44 For Business Accounts Only

The Weekly Track waiting

- The Weekly Track – Waiting by Bob Savage
http://track.com/articles/the-weekly-track-waiting/

There is too much of a risk of a top to chase and too little evidence of a top to sell, so we wait. That is the technical picture for many global markets as of Friday with S&P500 making new highs but without much volume or conviction into a new month. USD is similar with the 102.05 Thanksgiving high seen as a risk for a blow-off top. So too for 10 year US rates – but you get the point – we are waiting for market confirmation of what our guts tell us, namely we have moved too far too fast and need more news to justify going further along the post-US election trends. The USD and US bond markets are intertwined by the emerging markets as many nations are selling US bonds to sell USD to cap their FX depreciation. Last week we moved from the Trump rally up being a relief for growth to one that maybe signaling panic and danger. So the week ahead will also be about listening to the speeches from central bankers as they react to the markets – particularly the FOMC, ECB
and BOJ. The divergence trade between US growth and rates higher and confusions in Europe thanks to politics, banks and mixed growth leaves many most concerned about the EUR rather than the JPY even as the JPY has been the biggest loser in November post Trump. Waiting is never fun – but it maybe the wisest course of action – as uncertainty from month-end, politics, more economic data and policy makers dominates the week ahead.