There are a few correlations that I find particularly compelling. The first is Chinese RMB (or CNY) next to WTI crude oil, as both are proxies in their own way of multi-dimensional crosscurrents between global “dollar” finance and real economy function. Since March, that correlation has come into renewed and tight focus. In the past few days, the CNY has [...]
Like industrial production, the condition of oil inventory in the US was updated today in contradiction of the expectations driving Federal Reserve models expecting “transitory” weakness to simply pass into history. Unlike the virtual conditions for the FOMC, crude oil markets are obliged to respect both the eurodollar and the physical realities of physical commodities. Last week, the US EIA [...]
Any ideas about junk bonds outperforming because of the booming economy confirmed by a monetary policy rate hike has been killed and buried. Conventionally, it was assumed that interest rates are not the primary “risk” parameter for high yield corporates of all flavors, and that is correct. Junk issues and lower tier obligors are creatures of the credit cycle, thus [...]
Crude oil prices are exhibiting all the signs of an increasingly difficult funding environment. The front end of the futures curve is being bent dramatically in relation to even close maturities just outside the next few months. Such contango is the obvious imprint of finance, though that is not to say that economic expectations are neutral in the curve. Far [...]
While the media remains fixed on supply, the rest of the financial complex is prepared elsewhere. On Monday, Saudi Arabia announced what the mainstream has been waiting for (and often blatantly demanding) since the summer “rebound” faded into August liquidations. Given the mythical status of Saudi supply, this was the one country thought to be the only possible savior. Crude [...]
Following up from yesterday’s nod toward monetary policy irrationality, the “relevant” markets today continue to profess their concurrence with it all categorized in that manner. I’m not just critiquing the readings of economists at the Fed and their conditional responses, I’m stating unequivocally that the entire affair, and all in it, has been reduced to pure farce. That starts squarely [...]
To say that the “dollar” is a mess to begin the week is to state the obvious. The condition left at Friday’s close has persisted, with commodities and such being sold heavily from the outset. Japan’s renewed “recession” (I use quotes only in the conventional sense, given that the Japanese economy never truly left) hasn’t helped in that regard, but [...]
Crude oil prices are being slammed again today, as the “dollar” continues to reek about the places where economy and finance come together. Crude oil is perhaps the most visible extension of that process, where finance helps figure out direction of prices that will eventually be necessary to physically clear (even and especially to storage) actual product. Given the position [...]
Copper prices closed yesterday at a new low just barely above the intraday low of August 24. In early trading today, the front maturity has blown past that point and traded as low as $2.164, and currently around $2.175 for another multi-year low. Crude prices are down sharply as well, though the trend in oil isn’t nearly as clear – [...]
Last week’s survey data around the world was a bit more mixed than anyone would have liked, an obvious statement that yet deserves the emphasis. Europe, for instance, remains mired in a fog of zombie-like “growth” that is notable for both a distinct absence of QE’s promised impact and the related Japan-like steadiness that suggests nothing good about near and [...]
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