evening wrap, march 11
market vibes
Another day of watching paint dry in NY except for oil which has decelerated like an egg dropped on the kitchen floor. Gold is in a range, copper, palladium and platinum are all in ranges. Stocks have been in a range since October and bonds, as I pointed out this morning, have been in a range for the last 3 years. And of course, bitcoin is in a range.
Yet two commodities, oil in March… and silver in January… went down 40% in 24 hours and one of them, silver, is in a range again! I would post individual charts to make this point graphically but we all know it chapter and verse. So… let’s keep going.
in the markets
Long bonds and ultras fell as much as 2 full points today, ignoring docile CPI data and weak UE last Friday. The narrative is, “Oil driven inflation and a March cut is 99% off the table.”
The dollar rallied with reasonable authority because, counter intuitively, the market expects higher inflation which is now bullish for dollars and bearish for bonds.
Gold inched lower because bonds and the dollar validated the inflation narrative… which, counter intuitively, overrode the fundamental gold thesis because inflation means higher interest rates and higher USD… which is bearish for gold so… higher inflation is bearish for gold now.
You can’t make this stuff up, only the market can. Exactly the same idea in other metals.
