View from London: Pound Outperforms Euro but Dollar in Driver's Seat
10/17/2017 12:16 pm EST
Jitters aren’t the same as panic and the fear moving markets is just not in place to offset any of the other stories like 3Q earnings, writes Bob Savage, CEO of Track Research in his Tuesday commentary.
While Asian shares continue to trade near 10-year highs, Europe stalls with the news just not enough to make the mood upbeat as U.S. talk of Trump supporting Taylor for FOMC Chair next drives everyone to Taylor rule calculations and rates higher faster.
The U.S. dollar (USD/EUR) is holding bid, emerging markets lost some of its luster along with gold while oil is higher as Iraq continues to play hardball with the Kurds over independence.
The German ZEW was weaker than expected but hardly weak.
The UK is holding tough as UK May had a constructive dinner with EU last night – holding out for hopes of talks still while UK CPI was at 5-year highs and BOE testimony talks of a rate hike in November but not much more.
The British pound (GBP/EUR) does better than the EUR but the USD is back in the driving seat with the focus on rates.
The only chart that matters today is going to be the 10Y to see if U.S. can break out – but with IP and import prices the news agenda that may be hard to do. Jitters aren’t the same as panic and the fear factors moving markets are just not in place to offset any of the other stories like 3Q earnings.