on jan 23 euro was 2251 - euro closed friday 2251 - ie the same
on jan 23 jpy was 110,64 closed Friday 108.78
Against the two main currencies its gone nowhere against euro and depreciated against yen
same time oil gone from 64.50 to 59.
I wouldnt believe too much as journos got to write something about the short term correction to equities which also dragged down gold and oil but commodities behaved like they should - on a relative basis they are not down as much as equities. Commodity currencies like aussie got slammed because RBA pretty much ruled out a rate rise while over the pond they concerned with increasing rate of rate hikes.
i have mentioned plenty of times and somewhat proven here is that concern is on supply side when price gets too high and shalers come back in with a vengence - US need around 14million barrels - now producing over 10 - in 2005 they produced around 4m - theres going to be an impact here on the $. In around 2009 US imported around 319billion$ of oil which was around half the defecit - when they no longer have to import the impact to current account and the $ will be seen
After GFC one has to expect some contagion and equities had not recorded more then a 5% correction over past 12 months so this was due. The reaction to spike in 10yr is a little bit unfounded as rates are still historically low and its not expected that the Fed neutral rate will be as high as it has been in the past.
If we see global growth remaining strong and certainly the earnings season has not been disappointing - then I would say this is an excellent opportunity to get in on commodities and raise some cash to buy assets (not repay debt but buy assets)
If they smart they will use this time to demonstrate that volatility is high and thus maybe assist in negotiation of price.
Dont think goldies will be too worried - its only 1st week of Feb.
Guess it will all depend if one thinks this is a correction or start of something bigger?
SEA Price at posting:
7.8¢ Sentiment: None Disclosure: Held
