Last Night Today

Gold is stronger as the world (incorrectly) perceived the rhetoric coming out of the G-20 as good for economies. Clearly they are good for Stocks as prices say so. But to call gold a risk off asset and watch it rally after last weekend majors me Want to strangle the media using cheap headlines like “safe haven” and “risk-off” to describe gold rallies. It is a lie. We don’t know if it is from intent or ignorance but you are being lied to. 

Gold is a hedge against paper fiat debasement, a preserved of wealth and a trading vehicle. It is not a hot potato for risk off  play. 

Technicals:

VBS/RTM Levels:

On Deck: 

Five Fed officials speak today:  Clarida, Quarles, Williams, Brainard, and Kaplan. We think Brainard’s comments may be the most interesting though not necessarily the most market moving. 

Meanwhile, the big data will be the U.S. manufacturing PMI at 9:45 a.m.

Market Snapshot:

Energy: 

Oil has rallied 4-5% after last month’s 22% plunge.

Russia and Saudi Arabia agreed to extend their pact, boosting the likelihood that OPEC+ will announce output cuts later this week.  Efforts to support the oil market also came from an unexpected source. The Canadian province of Alberta announced a 325k barrel a day cut (8.7%) starting in January.

Fx Markets:

The high beta dollar-bloc and Scandi currencies are leading the move against the US dollar.  Among emerging markets currencies, the South African rand, the Mexican peso, and Chinese yuan are up over 1%.

Global Equities:

Asia:

Equities have rallied strongly.  The MSCI Asia Pacific Index nearly matched last week’s 2% gain.  China, Hong Kong, Taiwan, and Singapore markets led the advance, gaining more than 2% each.  India was the sole exception.

Australia and Japan for OppTrader Subscribers:

The dollar initially traded higher against the yen, reaching JPY113.85 in early Asia.  It trended lower and returned to the pre-weekend lows near JPY113.35. A break below there would undermine the technical tone.  Last week’s range was roughly JPY113.20 to JPY114.05.  There are $1.3 bln in expiring options at JPY113.15-30 today and nearly the same amount between JPY113.70 and JPY114.00.

The Australian dollar gapped higher, and that gap appears on the weekly bar charts, making it potentially even more significant.  Last week’s high was $0.7344, and Bloomberg has today’s low at $0.7348. the last session’s high was near $0.7325.  The upside momentum seemed to falter in the European morning, and the gap may attract prices. There is are A$1.1 bln in $0.7350 strikes that expire today.  The RBA meets tomorrow, and it is widely seen on hold for some time.

Europe:

European shares are higher, and the Dow Jones Stoxx is up more than 2% in late morning turnover in what could be the biggest advance in eight months.

US stocks: 

They are higher. Just not as high as the rest of the world. But that is because the world has a lot of catching up to do. 

It makes no sense that US stocks remain buoyant in a risk off market and also rally in a a risk on play. Unless of course you acknowledge and accept that the Fed and the PPT are managing markets to control descent on bad news. So surf, fade, or gtfo of the way. We will trade.

Good luck

Gold People:

Look for the 300 page New Orleans Investment  Conference Transcript we have obtained  for no cost that is being sold by the conference people for $200.

We will offer it to you gratis. All we want is an email to send it to you

Email my assistant:,

nsterios@echobay.com to receive the complete transcript.