Markets pecked by Black Swan gauntlet

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It’s risk off again. The US dollar eased:

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Largely on a strong JPY:

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Commodity currencies were mixed:

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Gold was firm:

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Oil too:

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Not so base metals:

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Miners fell:

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US and EM high yield was weak despite oil:

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US bond were bid:

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The Japanese bond curve flattened, the opposite of BoJ intentions:

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The S&P500 was hit:

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It’s not one thing, its everything:

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  • markets continue to ignore the the Bank of Japan’s objectives and buy yen. I still think NIRP is being underestimated but that’s not how markets are playing it;
  • the US election is weighing on everything as it proves closer than many expected. Tonight is the first debate, and
  • Deutsche Bank is sinking in Europe underlining the precariousness of Eurozone politics given Germany is now caught between its role as financial disciplinarian and a banking crisis at home.

As I said last week, if you want to play the Black Swan gauntlet of the next few quarters – including the Fed, BoJ, ECB, EZ elections, US election and weak oil – then gold is your option.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.