Clinton Baker No Comments

Dollar bills take over. Sorry I mean bears my bad….

So dollar has taken a whack of late providing some much need relief to dollar debt holders,I guess this wasn’t a surprise considering its impressive run. With the fed tightening and the US economic indicators showing signs of cooling or at least pointing toward more challenging times which has long been echoed throughput the financial community for many months, many have reconsidered such bullish or optimistic positions.

USD Weighted Basket

Bitcoin has smashed many expectations over the last few weeks hitting more than $2700 per coin, this all contributes towards a lower dollar. The lack of faith in the worlds #1 reserve currency may be fading or at least feeling some real pressure because some very interesting things have been occurring in the world of crypto currencies. For example the Winklevoss brothers tried to seek approval for the first ever Bitcoin ETF from the SEC. When the news began to circulate Bitcon rallied, but this was short lived once it was known the SEC rejected the Winklevoss Bitcoin ETF proposal and so began to trade lower in later sessions. However! News soon surfaced that the Sec would reconsider the Winklevoss brothers ETF proposal possibly pointing toward and actual approval of the 1st ever Bitcoin ETF by the United States authority body opening the floodgates to a new way of using cash. Baring in mind world governments are already doing a lot to ban cash.

Bitcoin Rally

Petro dollars and lack of also means added pressure for the dollar. OPECs members have again agreed to cut supply due lack of demand and high inventories further adding to the woes of the US dollar.

Crude Oil CFD

Also I belive the recent rally into european stocks is due to Macron winning the French election and not Marine LePen. I find the Eurozone such a fragile place at the moment due to such political turmoil and lack of confidence in the European Union that im not sure this rally can last long especially if the US economy shows conformation of slowing.

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Clinton Baker No Comments

Our brief take on markets recently. Whats your thoughts?

So how are you finding the market?  Heres our brief take on things we are watching closely….  U.S. Markets are being squeezed higher over the past few weeks and we think it could either be short lived if the price action is anything to go by.  However, it could keep pushing onto and perhaps the S&P’s may reach 2300.  Although some areas of the U.S. economy suffered in this months data, slight upticks in some of the data also suggested some balance to the U.S. economy, however we do feel these are temporary and we are looking for more consistency.    We are watching markets closely as many of you will be doing over the coming months.  The $DXY seems to be tearing and then pulling back seeming as if it’s being kept on a leash for now.  Reports on the bond markets are looking increasingly creaky with negative rates and many are saying this environment is tuff as traders seek yield long term.  We should also say that we have heard reports that if things start to turn they will likely show in the bond market first.   The table listing the countries with negative real rate countries is scary and it could easily grow so keep your eyes peeled on the increasing war with rates in these ZIRP and NIRP zones throughout the world as $12 trillion of global debts embraces negative yielding territory.  Especially US yield curves!   Gold has been doing amazing things of late making moves from the lows of 1100’s and now holding these newer more recent highs of 1300-1350.  We’ve also heard some compelling cases from the likes of Jim Rickards and Brett Johnson (just to name two!), on why gold should be considerably higher, like much much higher around 15,000 oz or multiples of.  But!  Could that be the day we see the end of our financial system (this time) or the day central bank and governments actually let markets find price naturally and we finally get a recession?  We’ll be watching gold closely from here.  For now, there are too many ticking time bombs to mention that could give us that event because things are so pent up.  Two potential problems that we do feel are worth mentioning from an equity point-of-view are Deutsche Bank (EU) and Citi (US).  These two banks ( and there are others) as some of you may or may not of heard, have got trillions in derivatives on their books which pose a very real systemic threat should anything “untoward” happen, a great piece was written by Michael Lewitt here on Citi.  You can google around for many recent DB stories an make your own assessment.  Please remember we are not recommending these trades, we are just divulging some things we’re looking at closely at GT Trading.  Enjoy, good luck and please feel free to comment.