what a week- wild equity, fx and rates swings globally
gold proce finishes the week badly right on 1700 ish- aud gold down last seven days close to 2240 aud to 2213 after wild swings like everything else in Friday trade
Fed balance sheet balance - contracted in size
Reduction principally from a further sell down on treasuries it held
data is a week old - but you will recall a week ago we had spike from135-160 at one stage to finish the week on ten year at 140 ish
biggest holder is continuing to be a net seller despite claims it is buying at a given rate - technically its true we will continue to buy- they are just forgetting to let everyone know that the fed New York is still furiously selling fed assets and driving up rates - hard to maintain a short term rate when your actually selling hard into the market - and selling more than your advising people you are buying - main rates pressure coming from fed
this week we started at 140 on ten year- cranked to over 160 last night before finishing the week approx 15 bps - huge - therefore it reasonable to assume they ( fed) are still major sellers and data should show more selling next week
bank deposits are soaring - so banks are taking it but want higher rate - which they are getting- as a result rate curves a steep- so good for financials that borrow short and lend long
france and Germany long rates still negative but moving towards zero- way off lows- real rates are moving closer to nuetral
For forst time in years - that’s putting pressure on gold and non yielding hard assets imo- together with pressure coming from dxy which continues to confound consensus and which sorta also hurts short usd long gold trade
personally if rates continue to rise- usd differential is attractive - that brings usd inflows and if in the short term it does break back above 93 there could be some serious short covering and consequences for a lot of commodities- time will tell
oil- huge move this week again - Saudis decide to keep production low after first saying it may ease- data in USA is positive throughout the week- some states opening right up as vacinne jabs apprently reach 2 m a day (really?) so that’s seen as positive for future demand - so oil up hard
so oil up very strong this month- this isn’t good for miners who will have experienced more margin compression this week from lower aud gold prices and higher energy prices to produce
here the petrol cycle is insane - Sunday last 120 for fuel- Monday morning 167- I wonder what it will be this week given last weeks stela rise
don’t worry though - there is no inflation
If you moved your prices like this in any other industry you would get investigated - but it’s fuel - we have petrol commish and it’s all ok that the price of fuel can routinely rise and fall almost instantly across the country - no woooooories
could be worse - just caught a piece across on news service detailing how the government now spends 190 a night to provide a tent on the ground , bathroom and some food for homeless in San Fran - 2.5 more than the cost of a one bedroom apartment there and in some cases way more than the cost of a hotel room—- insane- taxpayers 190 a night usd to fund people sleeping on ash felt in a tent- —- seems like sudden inflation or is is another outrageous absurd of taxpayers money
gold equities aren’t attracting me yet with gold price experiencing solid dxy pressure and pressure from rates - still think the 20 percent off ath of approx 1660 needs to be tested to see if the bull market holds or if a new bear market ensues because of higher rates and rebound in usd
Inflationary pressure must come through for miners of all types looking to build plants with the cost of steel - blah blah blah cranking- and the cost of funds increasing is also going to be a serious headwind and crimp on margins
Strong market rebound last night but major highly hyped high flyers still got clipped
