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Who Are You?

The following is an excerpt from an article in Naval Institute magazine – there’s a lesson not only for navigating a ship, but for traders too.

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Shortly after dark, the lookout on the wing of the bridge reported, “Light, bearing on the starboard bow.”

“Is it steady or moving astern?” the captain called out.

Lookout replied, “Steady, captain,” which meant we were on a dangerous collision course with that ship.

The captain then called to the signal man, “Signal that ship: We are on a collision course, advise you change course 20 degrees.”

Back came a signal, “Advisable for you to change course 20 degrees.”

The captain said, “Send, I’m a captain, change course 20 degrees.”

“I’m a seaman second class,” came the reply. “You had better change course 20 degrees.”

By that time, the captain was furious. He spat out, “Send, I’m a battleship. Change course 20 degrees.”

Back came the flashing light, “I’m a lighthouse.”

Sell euro rallies at target 1.10 in coming months – ANZ

ANZ with a rare euro-bearish call

ANZ Research discusses EUR/USD outlook and adopts a bearish bias over the medium-term.

Sell EUR rallies as EA disinflation pressures grow. The ECB is clear that its policy options are not limited, but the persistence of negative interest rates does imply constraints. Whilst the US FOMC indicated it will cut interest rates to underpin the expansion if necessary, our assessment is that disinflation risks in the euro area are much greater,” ANZ notes.

“The bund yield is at record lows, measures of inflation expectations have also made record lows recently and confidence that inflation will reach the ECB’s target is fading. The factors underpinning euro area weakness are, to a large extent, external to monetary policy. They include trade tensions, auto industry difficulties, climate change targets and lingering fiscal risks. It is reasonable to argue that inflation expectations could converge on core inflation. Monetary conditions must therefore stay extremely accommodative.

We look for a test below 1.10 in EUR/USD in coming months,” ANZ adds.

Unlikely US would agree to lift restrictions on Huawei – US official

US official cited by Reuters

  • Trump’s decision on whether to impose more tariffs on Chinese goods depends on meeting with Xi, nothing agreed ahead of time
  • Unlikely US would agree to lift restrictions on Huawei
From China’s perspective, it would make sense that Xi wouldn’t agree to meet without assurances that more sanctions wouldn’t be applied. If Trump walks out of the meeting and hits the US with a fresh round, it would reflect poorly on the leader. In general, these things are always agreed on ahead of time, with room for tweaks.

China wants ‘balanced’ trade deal at G20 but US isn’t interested – report

CNBC report

Some negative trade news crossing. Here’s the story.
China believes any new agreement will need to be evenhanded, while U.S. Trade Representative Robert Lighthizer told his Chinese counterparts that balance won’t happen, according to CNBC’s Kayla Tausche, citing a person with knowledge of the White House position.
It’s not all bad news. It says a truce is still possible at this meeting, even if there isn’t an agreement on these issues.