Safe haven buying is ignoring precious metals and piling into bonds today with the long-end notably outperforming (-6bps) today. This has compressed the yield curve even more, putting more and more pressure on the "rate-hike environment" hopers who bought banks like they were told...
This has compressed 2s30s below the "Dimon Bottom"
Fool me three times?
Gold has historically rallied for at least 100 trading days after the first hike by the FOMC, but as HSBC's Jim Steel explains, this time it could be longer. Steel sees three key reasons to remain bullish and forecasts USD1,300/oz this year (though warns that beyond that level, physical demand may weaken and help curb further rallies.)
Tightening and gold Background: The end of the long-run bull market
Lately being a bear has meant sharing quite a crowded field. First it was JPMorgan, which not only said to sell any rallies, but three weeks ago said it had gone "underweight stocks for the first time since the financial crisis"; then technicians such as Evercore ISI summarized their sentiment as follows "I'm out; my bullish tactical call is over", and then on Monday, even Goldman jumped on the bandwagon urging clients "to go to cash" ahead of "expected elevated volatility" and that the "current relief rally" is almost over.
For anyone still looking for context to the biggest ever collapse in commodity prices in history, one far sharper and now longer than that in the deflationary aftermath of the Lehman failure, look no further than the chart below: as the WSJ notes, the U.S. mining industry, a sector which includes oil drillers, lost more money last year than it made in the previous eight.
Following last night's API-reported yuuge build in crude of 8.8mm barrels (and draw in gasoline and Cushing - confirming Genscape's earlier report), DOE reports today an even bigger 9.36m barrel build - the 2nd biggest build in a year. Crude prices were confused as this massive build was offset by a drop in crude prioduction to Nov 2014 lows and a big draw at Cushing... but for now Oil is extending losses. Finally we note that gasolineprices are now flat from January last year - less unequivocally good than before.
DOE: