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Market Still Fixed On Dollar as Risk On/Off Indicator Today

07/10/2018 11:48 am EST

Focus: FOREX

Robert Savage

Partner & CEO, CCTrack Solutions

Nothing but details today with the market still fixed on the USD as the risk-on and off indicator for trade fears and rate hikes, writes Bob Savage Tuesday.


Details matter but not much. Many argue the more facts and figures you keep in your head the less you can think or see. Just talk with a millennial about the smart phone and why memorizing poems or equations seems pointless.

Some of this plays out in markets. The fear of food inflation from tariffs in China didn’t materialize in June but may be something for July and beyond.

The fear of UK Theresa May’s demise didn’t happen despite Boris Johnson leaving but may be something to watch in the Autumn.

The Supreme Court nominee from Trump – Brett Kavanaugh – will cement a pro-business court for years to come should he get the Senate confirmation, but politics in the U.S. are on summer holiday.

We could take the argument that all details are lost when England is in the semi-finals of the World Cup and TV news gets switched to football.

However, some stories do matter.

The Erdogan nepotism in his cabinet – appointing his son-in-law to run the Treasury and Finance Ministry hit the Turkish lira (USD/TRY) again.

France’s Macron plummeting approval ratings lead him to respond that he isn’t the “president of the rich.”

NATO summit noise increases as he visits UK then Finland to meet Putin. What mattered most overnight in Asia was the lack of details about the cold trade war heating up.

What mattered most in Europe was the actual data with the German ZEW drop stalling talk of ECB quicker action and hitting the euro (EUR/USD) back lower.

The British pound (GPB/USD) responded to better monthly GDP and ignored weaker IP as a pipeline distortion. The French and Italian IP reports netted out. Nothing but details below with the market still fixed on the USD as the risk-on and off indicator for trade fears and rate hikes.

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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