Morning 8-31

Eurozone CPI was uninspiring as the core reading came out at 1.2 % in line with consensus. Three out of last six Monthly reports have resulted in a reading of 1.2% and the last time Core printed above this level  was 4 years ago .This report caused the Euro to trade lower, following the trend of last few days and then got shoved  further when ECB sources said members are getting worried about Strength of Euro. She is down 50 ticks, with a range of 70.A big reason for the Weakness in Euro has been the turnaround in the dollar based on technicals, a solid reversal signal has been given this week plus  Strong US data all add up to a but mentality.. Today we do see The PCE Inflation reading, the Feds favorite Inflation Metric. The weaker Euro=Stronger European stocks with Italy’s Mib +1% and Dax +.6% A risk on  Feel in stocks but Bunds and Bonds appear  Complacent or have their collective focus elsewhere say on Debt ceiling or North Korea as they stand little changed. What isn’t little changed is Gasoline. October up another 5 handles   +25 % in 5 trading days. The latest Catalysts is that the largest gasoline pipeline in the Country which supplies product to east coast is shutting due to lack of Supply to ship. Oil still heavy as Oil demand destruction still evident.

A decent PMI number from china is a good enough reason to buy Copper (.7%), Zinc (1.2%) and aluminum (2%).Gold a little bit lower, but still above $1300

 

A few notes:

  • Yesterday during A trump speech He said he has a great team of people working on tax plan, he didn’t mention Gary Cohn. Some are saying this is a sign of a fallout between two? Something to monitor
  • The Cost Of rebuilding after Hurricane Harvey may very well slow down the Tax Break wagon as Government will have to fund recovery
  • Month End action today

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