Markets appear nervous . . . .

[errolanderson]

Group . . . an opinion and an observation but, global markets are now showing signs of nervousness.

The bond market is now sending warnings about the U.S. economy. High yield debt is now selling off and the Treasury yield curve flattens. In other words, yields of longer duration bonds are getting closer to the yields of shorter duration bonds. This can be viewed as a forewarning about an incoming recession.

Global commodity prices are having a difficult week. Copper to cattle to soybeans have reversed and now in-decline, China equities are now selling off which is a warning for commodity markets. China's bad debt (shadow banking) is now a huge concern (IMO) to North American markets.

And central bankers are meeting this week. It is clear there is nothing left in their tank to fight deflationary pressures. The Fed talks up three (3) rate hikes in 2018. There is little chance of that (IMO) as the U.S. may be on-the-cusp of falling head-first into recession entering 2018.

Realize, the pot is being stirred by these comments, but markets can act like an ostrich with its head in the sand until its simply too late. Errol

[Oliver88]

Errol, what's your prediction with the CAD vs USD over next 6-12 months?

[macdon02]

Just a hunch and that's it, but I have a feeling there's a pile of scared money in Saudi Arabia that's trying to cash out and get mobile. Gold has had a couple panic moments 4 billion in 10 minutes type deals. Euro today got goosed, Draghi? Or Arabs? Crude selling off. Kinda fun to watch if there's no margin call involved. Options only in this environment

[errolanderson]

Oliver, calling currencies is one of the most difficult markets. But resistance levels up are now support lines going down. Do see a major support line just below 76 cents. Loonie could also break above 80 cents should a U.S. recession spook their dollar into 2018. Oil prices very unpredictable, but believe Saudi Arabia has lost its Midas touch. OPEC has lost an incredible amount of power.

Gold is in trouble without Rocket man in the news. Global gold demand has now collapsed to an eight (8) year low. India’s severe recession has taken a huge toll on the world’s largest buyer of bullion.

[the big wheel]

Errol if commentators such as your self keep saying the market is nervous pretty soon it will be and you ll finally be right.
Is there a time the markets aren't nervous? Things change in a short period of time shorter than they used to partly because of this technology which this forum is on.

[helmsdale]

Back up the truck, and BTFD!

[errolanderson]

Errol if commentators such as your self keep saying the market is nervous pretty soon it will be and you ll finally be right.
Is there a time the markets aren't nervous? Things change in a short period of time shorter than they used to partly because of this technology which this forum is on.

Markets and investors have been extremely complacent over the past 2 to 3 years through this never-ending U.S. bull run in equities. The VIX index is a gauge and an indication of investor fear, which has been incredibly low for some time. Even the threat of N. Korea war did nothin to deter recent stock market gains.

If investors have been nervous, they certainly haven't shown it.

[farmaholic]

Is it anything another round of money printing can't fix?

[FertaCloud]

Really they have been saying Chinese shadow banking was going to cause global turmoil since back in 2012 if i recall. thats not new. What is, after 7 years of central banks of pumping money 2018 will see the first removal of that liquidity, albeit a small amount. Does it cause a correction they cant control, or at the first sign of problems do the central banks reverse course and start pumping money back in.

[errolanderson]

Is it anything another round of money printing can't fix?

If the U.S. heads for recession over the next year, the Fed has already indicated QE4 (round 4 of money printing) may be born. This is opposite their current policy / strategy now of monetary tightening (hiking rates 3X in 2018) and shrinking the Fed balance sheet. Gong show all the way . . . .