gold, page-29460

Yes, a lot of irrational exuberance in US equities & a real refusal to face up to the reality of the data. Funny how traders were surprised when there was really nothing to be surprised about. US GDP growth was 0.7% in Quarter 1 and has been widely reported. Just shows how myopic traders are and how quickly risk which is hiding in plain sight can emerge.

Fed will continue to tighten and this will make a recession inevitable. Should be confirmed by Quarter 1 2018, but back half of this year will see continued slowing & political turmoil.

https://www.ft.com/content/931930ae-36b9-11e7-bce4-9023f8c0fd2e

The dollar slid into reverse after weak US inflation and retail sales figures surprised traders, prompting the buying of core government bonds and a strong end to the week for gold prices. The yield on 10-year US Treasuries sank 7 basis points to 2.33 per cent. This biggest decline in a month came after yields reached six-week highs on Thursday, trading above 2.42 per cent thanks to strong US producer price data. But Friday’s move triggered a chain reaction in other core markets as the 10-year Bund yield fell 3bp to 0.39 while gilt yields dived 7bp to 1.09 per cent, UK sovereign debt outperforming its German peer amid wariness over this week’s poor British industrial data and Brexit uncertainty. “Friday’s US data looks fairly disappointing, a broader softening nudged the core rate of inflation back below 2 per cent to 1.9 per cent and likewise both headline and core retail sales missed estimates,” said James Smith, of ING Bank. “But today’s sub-consensus US data are unlikely to rock the Fed’s boat, meaning there are increasingly few reasons for not hiking in June.”