By Chris Becker
The bad economic news continues to roll in, so let’s buy stocks, nay everything! This time it was August CPI in the US which unexpectedly slipped into deflation territory for the month, with core inflation barely travelling at less than one percent annually. This gave rise to bigger animal spirits on Wall Street – Europe was too late with the print – while bonds halted their sell off.
Gold was an immediate recipient, while oil prices soared on a production cut and inventory drawdown that was also unexpected. The USD was down against all the majors with the Aussie teasing with the 72 cent handle, mainly on the commodity plays.