Barbara Rockefeller
Rockefeller Treasury Services, Inc.
Outlook
Today’s JOLT and retail sales data is expected to show good growth (0.2% in retail sales after 0.2% the month before) and a widening divergence with European conditions. If US data is good, the divergence should favor the dollar today. Also favoring safe-havens is the idea that the Russian convoy was a clumsy attempt at a Trojan horse and the brave one standing up to the bear is… the Red Cross. The EU warns that it better not be a front for an invasion, but there is no real threat. Many analysts, especially German ones, warn we will wake up some morning and find the equiv-alent of a Berlin Wall being built, as the Germans faced in 1961. We were surprised and aghast then and likely to be surprised again.
If we expect geopolitical tensions to continue, and that includes the temporary lull in Iraq, we still need to expect unhappy surprises. The US has betrayed the Kurds more than once and looks extremely likely to do it again. Europe wants to sound firm but realistically, doesn’t like to get its hands dirty. Assuming things are going to hell in a handbasket, the yen should probably start strengthening again too. We say the chart is clear—it’s untradeable.
Fun Tidbit: Some sponsors, including Bank of NY Mellon, are holding a 70th anniversary shindig at Bretton Woods in New Hampshire on Sept 2-4. Speakers will include Issing and Taylor, although to get them you have to put up with jerk Bill Rhodes. Programs run from 8 am to 9 pm. Cost is $3000. Anyone going should read Benn Steil The Battle of Bretton Woods ahead of time.
This morning FX briefing is an information service, not a trading system. All trade recommendations are included in the afternoon report.
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