by Chris Becker
Calm is definitely not the word to describe the bringing in of the New Year. The pre Christmas rally is dead, as the Fed rate rise and Yuan depreciation conspire to remove every last ounce of confidence from risk markets, particularly commodities. Last night we saw US and European stocks fall again, now down almost 4% in less than a week as money found a haven in bonds as the major 10 year sovereigns jumped nearly 10 basis points. Oil is where the action is, falling nearly 6% to decade plus lows. Gold has been the only standout, rising nearly 2% and building a strong base. But in currency world, its all about King Dollar and Prince Yen in a one way tradeoff.
Recapping Asia’s session where the Shanghai Composite rallied 2% fully supported by PBOC purchases. This is indeed a crazy market and one I won’t trade! But it provides key inputs for others and I still believe this is the calm before the storm for mind – terminal support at 3000 points is key here- if that’s broken, think 2000 points real quickly:
