The clearer signal to watch is in U.S. 10-year bond yields and the 55-day break at 2.797% holding still. This opens 2.62% tests for 100-day should U.S. jobs and other data prove less than glorious, writes Bob Savage, CEO of Track Research Monday.

What you think isn’t what you say. However, the internal discussion in your head drives the external actions of the day and what you do matters more than any talk.
Fear versus greed balances across markets in a slow start again with Trump and Kuroda dominating the news agenda – the U.S. stock futures are bouncing, bonds lower - leaving many wondering if this is all another exercise in buying the “dip.”

So far this strategy works but 2018 has provided less surety and more volatility around that idea. The U.S. stock market drop Monday was no joke but it failed to spark the same level of panic globally overnight.

The FAANG stocks lost $78.7bn in market cap yesterday with Trump attacks on Amazon (AMZN) and Facebook (FB) still mired in the private data bog the main drivers.


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The Japanese yen (USD/JPY) had another choppy trading session as BOJ Governor Kuroda said the central bank was having internal discussions on how to exit from its massive monetary stimulus program, but kept up his view that nothing is going to change for a long time.

Trump talk that a NAFTA deal was likely within two-weeks also helped change sentiment on trade war fears in Asia even as tech and chip shares fell. In fact, the overnight is about less fear and more about hope as the internal discussions look for opportunities in volatility.

As for the other stories overnight, RBA on hold was a non-event but the PMI there surprised to the upside.

European data was mostly weaker and leaves open the wait for more political clarity whether about Italy or about the Draghi replacement at the ECB – with a new front-runner being suggested – Finland’s Liikanen.

All this puts the trading of forex in a back seat and lifts rates and stocks to the front. While most will obsess about the S&P 500 (SPX) and the 200-day break down, the clearer signal to watch is in US 10-year bond yields and the 55-day break at 2.797% holding still. This opens 2.62% tests for 100-day should U.S. jobs and other data prove less than glorious.

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