Gold

March 27, 2020

So the markets did not have a nice time today: Canada’s main stock market resumed its slide after a three-day winning run as investors grew more nervous about the spread of the coronavirus pandemic and the Bank of Canada slashed interest rates to nearly zero. The Toronto Stock Exchange’s S ...

April 1, 2020

Well, now that the horrors of March are done with, I’m sure we’re all very happy to start off a bright and shiny new … well, never mind: Faced with grim new projections of the potential scale and economic ramifications of the coronavirus pandemic, investors dumped stocks on Wednesday. The ...

Monday Blues: Fed Moves Bigly and Stocks Slump

Overview: The Federal Reserve and central banks in the Asia Pacific region acted forcefully, but were unable to ease the consternation of investors. The Reserve Bank of New Zealand cut key rates by 75 bp. The Bank of Japan appears to have doubled its ETF purchase target to JPY12 trillion, and t ...

Even Turn Around Tuesday is Flat

Overview:  While the markets are not as disorderly as they have been, the tone is fragile, and the animal spirits have been crushed.  Australian stocks fell more than 10% last week and dropped another 9.7% yesterday before rebounding by almost 6% today to be one of the few Asia Pacific equit ...

Bonds Join Equities in the Carnage

Overview: A new phase of the market turmoil is at hand. Bonds are no longer proving to be the safe haven for investors fleeing stocks. The tremendous fiscal and monetary efforts, with more likely to come, have sparked a dramatic rise in yields. Meanwhile, equities are getting crushed again. St ...

ECB's Bazooka Support Bonds but not the Euro

Overview: It is not just that the dollar soared while stocks and bonds continued to plunge.  The dollar's strength is, in effect, a powerful short-covering rally.  It was used to fund a great part of the global circuit of capital.  The circuit of capital is in reverse now, and the funding cu ...

Markets Ending the Week on Better Note

Overview:  Dramatic price action continues but in the other direction.  Stocks and bonds have rallied strongly, and the US dollar is snapping a strong advance with a sharp and broad setback.  The immediate trigger is hard to identify.  Some accounts linking it to fears that the California s ...

The Economic Tsunami that has Begun and the Drive for Cash

With swarms of locusts in Africa and the Middle East and a particularly virulent virus spreading around the globe, the coming crisis may feel like the end of days. An economic tsunami has been unleashed. A consensus appears to be emerging among economists of the largest contraction in global GDP ...

High Anxiety is Auto-Correlated

The economic and financial reaction to the global pandemic has triggered a surge in the US dollar, which itself may amplify the disruption that is evident throughout the capital markets.  The macro analysis piece (The Economic Tsunami that has Begun and the Drive for Cash) focuses on the fund ...

Greenback Demand Not Satisfied by Swap Lines

Overview: In HG Wells' "War of the Worlds," the common cold repelled a Martian invasion. Now, a novel coronavirus is disrupting everything and everywhere. Global equities continue to get hammered, though the apparent relative resilience of Japan may have spurred some buying of Japanese equitie ...