“The paradox of Norway’s oil exports is that lower foreign earnings translate into more, not less, demand for NOK.”
That’s from Deutsche Bank and it sums up the conundrum facing Norwegian officials as they attempt to cope with the sharp decline in crude prices that threatens to cripple the country’s economy.
With markets in a sharp correction to start 2016, market commentators nevertheless still hold a downside bias for gold. The rationale for this downside has shifted however, from a fear of FED normalization to a fear that deflation and associated asset-capitulation would take gold lower in a "dollar short squeeze", reminiscent of gold's sell off in 2008. With a well-grounded framework for analyzing the gold price, we fear neither rationale; we still view a significant fall from today's level an unlikely outcome, or temporary at best.
First thing this morning, after the BOJ's announcement of negative rates which promptly pulled all treasury yields around the globle lower, we asked a simple question: how big large the global negative rate bond universe grow to?
How many trillions in government bonds are now sub zero
— zerohedge (@zerohedge) January 29, 2016
The US total rig count dropped 18 to 619 in the last week with a drop of 12 in oil rigs (to 498) as the ongoing lagged drop of crude drives rig counts every lower. Perhaps oddly, given the rig count decline, WTI is tumbling as a 12 rig drop is clearly not enough...
The trend continues...
And it appears the market wanted more rig count declines...
Charts: Bloomberg
What will they call this "crisis"? Or is it transitory and different this time?
Thanks to BoJ's idiocy, The Dollar is surging once again...