So Far, Traders Still Playing 2018 from 2017 Book

01/03/2018 2:48 am EST

Focus: CURRENCIES

Robert Savage

Partner & CEO, CCTrack Solutions

Rates and forex seem to be having the most volatility but even that is modest. So far playing from the 2017 book, no matter that it’s like watching reruns on TV or rehashing Tweets, writes Bob Savage of Track Research Wednesday.

News that doesn’t matter is defined as stuff you read and forget, the things that markets worry about and then ignore instantly.

Tuesday was about oil higher and the NASDAQ 7K hat break.

The risk on mood from the US continues.

Overnight had plenty of “stuff” with:

1) Trump tweeting about North Korea after Kim Jon Un states he has completed his nuclear program. Trump noted – “I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works!” The war of words was ignored in Asia and risk markets rallied again.

2) China threatens retaliation for the Ant-Moneygram merger block from CFIUS. US companies doing business in China are on watch.

3) MiFIDII launch starts but futures get a waiver delay. Volumes are too light to tell if this means much for markets.

4) ECB Nowotny echoes Coure – may end bond buying in 2018. The taper talk continues but the euro (EUR/USD) stopped responding to it today.

5) German jobs were better, UK Construction PMI worse and nobody seemed to care much – as bonds rally along with equities bringing further joy to risk parity plans.

The lack of reaction to much of anything new seems typical of 2017 more than something unique to 2018. We are all waiting for the US FOMC news today and that makes the USD rally back after 5 down days notable and something to watch in concert.

Rates and forex seem to be having the most volatility but even that is modest. So far playing 2018 from the 2017 book has been just fine – no matter that it’s like watching reruns on TV or rehashing Tweets.

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