The British pound (GBP/USD) fell because it could (blame Brexit, BOE unreliability, month-end noise) – making the random punch to USD haters more powerful. It’s chart to watch today with mean reversion and next round thinking, writes Bob Savage, CEO of Track Research.

The risk-on mood hit a wall called month-end in Europe, preparing the U.S. for the next round of mood roulette where technical bounces meet quarter-end reallocation. The prime example is that many analysts note that the Facebook (FB) bounce back Monday was modest to the rest of the pack and it is facing regulatory pressure – yet it remains 6% above its lows - and the candle chart formation screams bottom.

The lack of Trump fears drives an extension for equities today – with trade in the rear view mirror, with North Korea talks far ahead and with Kim Jong Un in Beijing talking strategy – geopolitical concerns are road posts for the unexpected but the smooth ride now is all that matters.

Behind the logic of risk-on, risk-off lives the U.S. rate risk with today’s auction an important lightning rod – we all know that at some point rates matter – but its hard to tell when with the U.S. 10-year closes with 2.8% handles for the entire month. Europe turned slightly bond positive as Spanish flash CPI missed the mark and EU sentiment dives.


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Lots of analysis on 1Q flows hitting tapes where equities beat bonds, USD beats G7.

Volatility seems to be the only constant of 1Q where the January trend reversed and two tests of the 200-day moving average S&P 500 (SPX) prove sufficient to spur investors to the next round – either like a boxing match or a drinking fest at a bar with neither analogy sufficient the capture the potential harm to one’s pocket.
Overnight, U.S. dollar (USD/JPY) gained beyond the RORO story as the former Japan tax chief Sagawa stated that neither PM Abe or his wife had a part in the Moritomo scandal.

U.S. dollar/China yuan (USD/CNY) drops as trade talk hopes spur revaluation hopes along with new demand for yuan from oil futures – touching highest since the August 2015 devalue - but holding with 6.20-6.25 key USD support still.

The euro (EUR/USD) reversed from 5-week highs with ECB doves talking today.

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