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There’s been no let-up in global growth worries this week and risk off price action has intensified as best reflected through more weakness in US equities. The latest concerns come from discouraging US earnings, ineffective China monetary policy easing efforts, and distressing data out of the Eurozone and UK. read report
Global sentiment has turned decidedly negative and risk off flow has intensified in financial markets. The Dollar and other currencies like the Franc and Yen that benefit in risk off environments have been rallying, while the rest of the currency market struggles. read report
We’ve been seeing signs of elevated stress in the global financial system. Commodities prices have been hit hard, particularly the growth correlated pro-cyclicals. Meanwhile, the US Dollar has been broadly bid. read report
Markets were all over the place on Monday. US equities put in a decent recovery, though this did nothing to help beaten down commodity FX, with the Australian Dollar, New Zealand Dollar and Canadian Dollar all getting hammered. read report
As the week gets going, the market will be contending with the latest bout of risk off flow which saw US equities reverse sharply off record highs. The flight to safety intensified in the latter portion of the previous week and Dollar demand picked up as well. read report
Investors have become more distressed into the end of the week, and this distressed sentiment has translated to some very clear risk off flow opening renewed demand for the US Dollar and downside pressure on US equities. read report
Most of the attention in recent sessions has been around comments from Donald Trump that the US has a big currency problem, and that the stronger US Dollar is hurting the US when it comes to competition with other trading partners. read report
It would be easy to look at the performance in the gold market and think broader commodities prices are surging. But that has not been the case. The strength in the gold market to fresh record highs is more indicative of a global economy in worry. read report
There were plenty of worrying signs on Monday. The US yield curve narrowed as recession worries grew. We saw a healthy GDP miss out of China, and some more data misses out of Europe including an abysmal Eurozone industrial production print. read report
We fully expect activity to pick up into the latter portion of the week as the market gets ready to take in back-to-back inflation readings out of the US on Thursday and Friday. Interestingly enough, currencies have remained relatively well bid, while stocks continue to surge to record highs. read report
