Sentiment is flapping around in the wind

Outlook:

We get a slew of data today, including Canadian house prices and US PPI and the usual jobless claims. Mexico reports Feb industrial output figures, likely a fourth negative reading. Since it’s expected, a bad number may not harm the peso, although we think it looks toppy. See the chart.

Sentiment is flapping around in the wind like a flag with too long a rope. Traders are all too aware they risk getting tangled up in it and are unwilling to take positions. Some minor moves (see the Swiss franc and CAD) are accompanied by wild minute-to-minute choppiness. To change metaphors, we are adrift. To fall back on the old saw, when in doubt, buy dollars.

Tidbits: In non-economic affairs, a smorgasbord of juicy tidbits. Ecuador evicted “the stone in its shoe,” Wikileaks chief Julian Assange, who was immediately arrested. The Guardian writes the arrest grounds are “failing to surrender to bail and on a US extradition warrant.” We don’t know where Swedish charges stand. Now there’s a creepy guy.

Meanwhile, Amazons admitted it has people listening to you over Alexa. As though we didn’t know.

Another creepy guy, TreasSec Mnuchin, stalled on letting the IRS Commissioner release Trump’s tax returns, despite the law being crystal clear, on the invented grounds Congress needs to name a legislative purpose. The law does not give the TreasSec the right to impose conditions so it’s an executive branch assault on the Constitution (balance of powers). Unless a court intervenes, this pushes the House to start impeachment proceedings before it’s ready (and so might chicken out).

Separately, Attorney General Barr announced the formation of an investigation into the FBI “spying” on the Trump campaign, aka lawfully following up information on possible criminal activity, and announced the findings of the committee at the same time, violating the principle of criminal justice (facts before findings). All the cable TV experts now say Barr has ruined his reputation for all time as just another Trump lackey.

More fun than Draghi’s speech was Congress grilling BigShot bankers in a committee hearing and lowering the respect level by asking some truly idiotic questions (“Are you a capitalist?”). Finally, it would take four votes in the Senate to refuse confirmation of the wildly incompetent Cain to the Fed board and they already have three.

Australia will hold elections on May 18. The short time between now and then concentrates the voter mind and is far better than the US’ two-year ordeal. Australian elections can be nastier than the US version but the AUD persists in trying to rally. We get red support at about 0.7120 on the hourly chart. As a rule, elections and FX are pretty well divorced but there may be some fallout. We can see 0.7200 but probably not 0.7300. Also on the other side of the globe from us, as many as a billion people will vote in India, the biggest election ever in the history of the world. The mind boggles.

Note to Readers: Get ready. Passover and Good Friday are on the same date this year, April 19. Markets will close early if they are open at all. Next Monday, April 15, we will publish the morning report but no afternoon reports (oral surgery, eek). We will not publish any reports on Thursday or Friday. Publication resumes the following Monday, April 22.

This is an excerpt from “The Rockefeller Morning Briefing,” which is far larger (about 10 pages). The Briefing has been published every day for over 25 years and represents experienced analysis and insight. The report offers deep background and is not intended to guide FX trading. Rockefeller produces other reports (in spot and futures) for trading purposes.

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