As FOMC Jerome Powell and U.S. industrial production (up 0.6% in June after declining 0.5% in May) are the next hurdles to eating a plain summer stew – expect rates to return as a key driver and the EUR to be the barometer.

The summer market continues with a bias towards clipping coupons and staying on the beach but the drinks are hot and the mixture unpalatable for the long-term. Some foods don’t mix with the weather, like a hot stew in a world filled with humidity.

Price action over the last 24-hours is similar to eating such a summer stew. The drop in oil prices yesterday brings back the doubts about global growth, troubles with higher volatility and role of US production and policy.

The Trump/Putin news conference set the Republican Party into a tizzy as the president cast doubt on the 2016 election interference by Russia.

The trade war worries in China remain central and Chinese yuan offshore (CNH) trades to 6.72 while housing prices in China rise despite less easy money and more government regulations. The jump underscores issues for reigning in bubbles.

Overnight data from New Zealand – particularly the RBNZ lifting its CPI sectoral factor model – lifted New Zealand dollar (NZD) to lead G10 winners over the USD.

RBA returned to talking about a hike next – though kept that as a long-term expectation – while the UK jobs report was good enough to keep the BOE August hike expectations high (over 90%).

UK Theresa May won the vote on her Brexit plans but after excepting four amendments that may scuttle EU acceptance. Her conservative civil war continues.

Italian industrial orders were also stronger, making clear that politics haven’t hurt business there. Little news for the trading machines leaving carry, selling volatility and waiting it out as the alternatives to food disappointments.

The alternatives to the USD and its risk correlation to equities is clearly in play again but the euro (EUR) and its stubborn holding over 1.17 maybe the one to watch today as the 1.1728 55-day is the pivot.

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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