The focus for risk isn’t the U.S. dollar (USD/JPY) (though JPY grabs the headlines) but euro/J...
View from London: Global Traders Don't Bet Where Dice Look Crooked
08/08/2017 2:57 am EST
The money is on the steady drift down in the USD overnight matters and it’s back to the U.S. dollar index for traders who want an early signal to wake up and watch their screens, writes Bob Savage, CEO of Track Research in Tuesday commentary from London.
Some put a lot of weight into numbers, others into the lunar and solar meanderings – if so the 8-8 date today and the lunar eclipse last night – both should make for an important trading day in markets.
But like a craps table with no big rollers, today feels empty of that anxiety that usually precedes bigger moves. So it goes for volatility and volumes in the middle of August.
We could make much about the North Korean threat to hurt the US a thousand-fold.
We could also rail on about the slowdown in China trade and what it portends for the rest of the world and commodities.
We could rattle warn on weaker Japan confidence in contrast to Australia and wonder if that all makes sense.
We could warn on German trade and current account surpluses being unsustainable.
Yes, the world has plenty of concerns and some were clearly out last night but the real movers of today are about option strikes settling in forex, the start of the August refunding in the U.S., the last dregs of 2Q earnings and the ongoing Trump tweet fest as he enjoys his non-holiday.
Markets are just not in any mood to bet big at a table where the dice look crooked.
Much like yesterday, the British pound/U.S. dollar (GBP/USD) and Australian dollar/U.S. dollar (AUD/USD) charts point lower and the U.S. dollar/Japanese yen (USD/JPY) chart the same while euro/U.S. dollar (EUR/USD) remains on a rocket launch and the U.S. bonds are waving a flag formation. Gold might be the key signal for risk purists.
However, the money is on the steady drift down in the USD overnight matters and it’s back to the U.S. dollar index for traders who want an early warning signal to wake up and watch their screens.
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