As calm returns to Eurozone periphery bond markets this morning, the euro remains supported despite the relative deteriorating growth backdrop. I’ve talked before about the idea that money remains trapped in the Eurozone as European banking de-levers providing perverse support for the currency. This morning Japanese investors may be making that bet:
I am still working on the assumption things are different in the Eurozone than they were in Japan, but it is a scenario worth keeping in mind.
Just when everyone was getting excited about gold’s “safe haven” role it gets hit this morning (down $18 now). Below is a chart displaying the 21-day correlation between gold and the US dollar index, now at -76.2%--that is tight and says as gold rallies the dollar index falls and vice versa…
TOKYO, July 14 (Reuters) - Japanese investors have been buying most of France's government debt recently in a record surge spurred by expectations that Europe faces the kind of deflation and growth that Japan suffered for decades.
I am still working on the assumption things are different in the Eurozone than they were in Japan, but it is a scenario worth keeping in mind.
Just when everyone was getting excited about gold’s “safe haven” role it gets hit this morning (down $18 now). Below is a chart displaying the 21-day correlation between gold and the US dollar index, now at -76.2%--that is tight and says as gold rallies the dollar index falls and vice versa…
Positions
Euro higher this morning, with little change in CAD and Aussie…overall the session is a bit quiet this morning…US stocks looking to pop higher on the open…oil continues to sag…US bonds flat…
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