Welcome to the gates of hell, markets started Monday greeted by Cerberus as the focus for trading centered around Brexit talks stalling, German Greens gaining in Bavaria and Saudi threats to respond to pressure from EU/U.S., writes Bob Savage Monday.

The Saudi threats over journalist Khashoggi disappearance leading to oil market jitters.

However, there may be more demons in the making with the news agenda ahead - all keeping risk-taking modest - as we face the midnight EU/Italian budget deadlines, U.S. 3Q earnings and U.S. retail sales. S&P 500 (SPX).

So, traders need to be more like Hercules today with plenty of labors to get over the wall of worry. Capturing the dog maybe simple in comparison to other stories yet to come. The reality of oil holding bid and Chinese yuan (CNY) holding 7 are important to finding stability outside of the U.S.

Emerging Markets remain in the crosshairs and with Asian shares sharply lower despite the U.S. Friday bounce, it’s clear that trade tensions dominate fears with the Japan data modestly upbeat except in the details of mood. Similarly, China sees much the same gloom about economic prospects while inflation remains the biggest and most obvious fact for markets, witness the WPI in India today.

The ability for global markets to see narrowing margins – PPI-CPI being a positive number means less profits – is the key worry.

Watching the markets, the safe-havens are back in play with the notable exception of the U.S. dollar (USD). We have to blame this on rates, the U.S./Saudi war of words and the role of China as the alternative. The notable winner today is Gold and it’s got a larger breakout to watch at $1235.

Gold maybe the best barometer to judge whether we are being dragged further into the circles of hell or we can escape for the next worry – if we break back to $1215 relax, else prepare for more trouble above $1250.

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