CRB vs. USD Has Reached 40 Year Support, But Can it Hold?
On 12/17/15 in this post we highlighted this chart which showed that the ratio of the CRB Index vs. USD was fast approaching a 30-year support line. In reality, if we extended that support line left into the early 70s…...
USDRUB Breaks out of 18 Year Channel to the Upside (The Loss of Fed Independence)
In the chart below at (A) USDRUB has broken out of a ~18-year channel b/t lines (1) resistance and (2) support to the upside. Every major swing high and low for the pair has come on these respective channel lines over…...
USDCNH Likely to Reach Low $7s Before Any Abatement in Chinese Currency Depreciation
I have talked at length on the site about the deflationary forces behind CNH depreciation vs. the USD. My contention is that so long as a regime of CNH depreciation vs. USD is in place, global risk assets will remain…...
TED Spreads Lead & The Real Driver Behind The Fed’s Decision to Hike Rates
I’ve written a good deal this week about TED spreads blowing out significantly recently. Today I wanted to look at snapshots of the last few times TED spreads have blown out like they are now to see how the equity…...
CNH Weakness Regime = Inexorable March Toward Greater Global Financial Stress
In the chart below I plot the following over the past year: USDCNH (inverted to show Yuan weakening; white) JNK (pink) Deutsche Bank (DB) 5 Yr CDS (inverted, so decline = CDS climbing; orange) SPX (red) TED spread (inverted, so decline…...
USD Peaking vs. Commodities, Gold Breaking Out vs. Commodities
In the chart below note the CRB Index, though well into its breach, at least appears to be bottoming on a relative basis vs. the USD, as the ratio b/t the two reaches ~30 year support. There’s a little bit…...
How & Why The Chinese Are Using Comex to Crush Paper Gold Prices While Simultaneously Laying the Groundwork for CNH to Become the World’s Next Reserve Currency
ZH has had much good commentary in recent months on the explosion in Comex open interest in gold (GC) relative to the amount of registered/deliverable physical held in related vaults, noting as recently as late NOV that the ratio had just…...
The Impossible Trinity & the Yuan’s “Stress Test”
The WSJ had a piece today on China, alluding to but not explicitly acknowledging its attempt to navigate the impossible trinity. To wit: China guided the yuan to its weakest level in more than four years as the country deals with…...
Euro Approaching L-T Support, Reaction Will Have Material Implications for Future Trajectory of Inflation/Deflation Thematic
As I look back on the site in recent weeks/months it seems clear that the work has begun to shift toward the thematic of a deflation/inflation debate. Or, more specifically, the site’s thematic increasingly seems to reveal a world lurching, at accelerating…...
Nikkei Still On Track Despite Summer Mishap?
I’ve not updated any of our Nikkei framework since 8/10 in this post. It was in that post where we provided an analog update comparing the Nikkei off its swing high in May-13 onward vs. the DJI off its own…...