It looks like Asian investors are selling dollar assets and buying gold.
There are 4 things to look now:
1. US 10 year yield: Cracking through 4.5pc will add additional pressure in the bond market. Now at 4.467pc and on the cusp
2. USD/JPY returning to levels when we had the yen carry trade reversal in Aug last year:
143.3Y now vs 142.50 ten
3. The DXY break-down below 100, now at 100.14
4. Gold continue to keep moving higher is a precursor of an ominous event ahead, $3200 does not even cap investor thirst
My cautions to you:
1. Something could have already broken, and some parts of the market already know it
2. Which stocks suffer on dollar decline?
3. Gold stocks are doing well now in perfect correlation with Gold now, but we have seen the movie many times before that this correlation breaks down when market returns to meltdown mode
4. Only thing is certain: Expect to be Blindsided, so best not to be long or short, and only short to hedge proportionately (but stay nimble). Policy turnaround is on the fly.
