desideratum
market vibes
November 26…)
Norman Rockwell’s "Freedom From Want” published in The Saturday Evening Post on March 6, 1943.
In the news
Iran opined this morning that production cuts have little hope of materializing at the OPEC meeting December 1 due to increasing US shale production, according to BBG. China’s “bleak” economic outlook was mentioned.
In response to Trump’s tariff announcements yesterday China said, “No one will win a trade war or a tariff war.” China’s trade surplus with America since 2023 is close to 2 trillion dollars so, there is that. The EU’s Ursula von der Leyen says Europe might buy some US LNG and cut their trade with Russia. Go natty.
This chart has been going around with updates for years. The implication is rising wealth. I have a question. If I borrow billions of Yen at zero and sell them for dollars and park them in US money markets does that count? Or is that something else?
In the markets
The Euro is 57% of DXY and its technical set up is interesting. There is a well-defined isolated low indicating (at least for the short term) a bottom. There is an excellent example of a mid-trend DMI 1-bar false positive and a perfect downtrend auctioning a chronic imbalance of selling EUR/USD for nearly 8 weeks without pause.
A major world currency serving nearly 400 million people was devalued by 15% swiftly and in silence before our very eyes. In a global financial theater where hyper-drama is scripted by punditry over a .25 basis point cut in an arcane rate at which no one can borrow… the shocking loss of purchasing power in EUROs (and many other currencies) has gone virtually without comment. Gold needed to buckle its seat belt but so far these losses have yet to be connected to gold.
Gold OI fell 14k yesterday. In long time frames positioning in gold is so low it’s a stretch to imagine any length could possibly be at risk. Nearly all of the remaining Comex OI has an average entry of ca $2000/ toz. I suppose someone could short it thinking USD is still going far higher, which could happen, but it would be so obvious only a fool would do it in this environment. Nukes+ Trump + debt = lower gold? You decide.
In hourly data it looks like we’ll test yesterday’s void soon. Maybe gold grinds sideways into January. I fiddle on the right hand side but never go home with it.
In other metals, copper continues to liquidate with no technical signs the market has bottomed. However, OI is so low and prices seem to have found a range so this could be it. I don’t see a recession anymore. Let’s have a look at silver, stocks and natty… and the perfect Thanksgiving guest!
