Tuesday is a day of jitters about central bankers, forex rates in Sweden and UK, Australian bond prices, Korean military tensions and a squeeze up in oil in the UK, writes Bob Savage, CEO of Track Research .
Focus today remains on the decisions for central bankers this week, and the data to support their push for normality.
The CPI from Sweden and UK is a case in point. The focus is on those who can wait and those who can’t. The barometer for both is the forex rate. The oddity of the situation is China where CPI was lower than expected, still safely below their target and yet, rates are higher, as a month-end, tax payment squeeze motors onward.
Japan doesn’t have the same fixed income experience as its 5Y sale today was good, and bonds rally there.
In Australia, weaker confidence, lower home prices sent bonds higher there. Korea suffers jitters ahead of the Olympics and asks to postpone U.S. military exercises even as the North continues to tunnel on its nuclear testing facility.
The other story for today is in the squeeze up in oil particularly in the UK as the main North Sea pipeline shuts for emergency repairs just as the nation faces a cold freeze. That will add to inflation jitters and make for a more difficult Bank of England forward guidance.
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