Emailed 13th August 2015
For me anyway – the uncertainty in the markets – brought about by the Chinese – has started the drift from shares through to the safety of the USD.
The U.S. is in a technical recession (from my point of view – read my blog for my reasoning) and the USD was being knocked down in overnight trade but is resilient in maintaining global strength.
What a bummer – the capital is moving – the bounce in gold, silver and oil is based on currency inflation movement. Dead cat bounce …..
The bond market is the indicator – with U.S. Treasuries because of the bid for the dollar.
The yield curve flattened 2/10 ths by around 4 basis points putting 10 year yields at 2.09% with the and the 30 year yields by 7 basis points.
The demand for German bunds was poor given the flight to the USD.
The problem with the Euro and the problems within the Euro Zone creates uncertainty with investors – hence USD demand – the reserve currency is safer than a cesspool of chaos within the EU.
DXY lost 1.2% in today’s trading, putting it around 96.15 last seen.
The euro performed best in the currency space with a gain of +1.25% against the US$ – idiots seeking to make money on the assumption that Greece will be resolved and everything will return to normal.
With US treasuries outperforming everything on the board, spreads will widen – as equity markets decline further – except for Greece that is (trying to make money on the Greece market crash – in Euro).
This is awesome – the more money into bonds is a set up – waiting for an implosion.
Cannot wait for Yellen’s response in September.
Sent from my iPad