All of the negative stories overwhelmed the positive ones today and highlights the role of safe-havens as measuring mood. JPY gains today are the focus and the risk with 108 back in play, writes Bob Savage Monday.

There is no such thing as an easy or good Monday. Monday’s are red not black. Or are they?

Here are the simple reasons to be bullish:

1) The Chinese PBOC cut the RRR for some banks by 0.5% starting July 5 – unlocking Chinese yuan (CNY) 700 billion in liquidity. The cut will apply to major state-run commercial banks, joint-stock commercial lenders, postal banks, city commercial lenders, rural banks and foreign banks.

2) The German IFO expectations were higher despite the handwringing over politics and trade.

3) ECB dovish again. The ECB’s chief economist Peter Praet, in an interview with Expresso, he said that the ECB expressed at its latest meeting “an anticipation that net asset purchases would end at the end of the year. We didn’t say we were now deciding to stop the program in December. We still have six months to go.”

4) Turkey sees Erdogan claims victory. Turkey’s lira jumped after Recep Tayyip Recep Tayyip Erdogan claimed victory in presidential and parliamentary elections, putting an end to a period of political uncertainty. Turkish lira (TRY) gained 3% to 4.54 but is now back to 4.72. The price action tells another story.

But there are a host of other stories killing any hopes for a rally back in risk. The TRY early gains were not sufficient to turn around global risk moods in emerging markets let alone developed ones.

The focus overnight was on another set of stories about Trump ratcheting up pressure on China over trade and their retaliation.

The UK May Brexit worries didn’t end last week with her Parliamentary vote as the U.K.’s five main business lobbies urged Prime Minister Theresa May to make progress in Brexit talks in a joint letter to the PM.

The weekend didn’t deliver any EU deal on immigration making Merkel’s task of holding her coalition together that much harder. The Italian’s were the main road block.

The local elections in Italy added to League victories and views that populist policy will derail EU plans.

Throw in that the Bank for International Settlements sees a “snapback” crunch as rising rates meet record high global debt. World debt ratios have spiraled to record levels during the era of super-easy money and markets are showing tell-tale signs of late-cycle excess, leaving the international financial system acutely vulnerable to a jump in borrowing costs. Any reversal in our fortunes could be “quick and sharp,” says the Bank for International Settlements, in the BIS’s annual report released over the weekend, always a sobering read for investors and central bankers alike.

View Bob Savage at TradersExpo New York in brief video interviews recorded Feb. 9:

How to create a risk parity portfolio
Duration: 3:25

How I pick assets on the basis of highest yield
Duration: 3:31

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