Contrary to appearances, the Mining GFC is still simmering on the back-burner. The US dollar was weak last night:
Commodity currencies were mixed with oil-related strong, Aussie at new highs but others still weak:
Oil was strong ad it appears it could run until US shale responds:
Base metals stalled:
Miners kept running:
US bond yields rose a lot:
And its bond slope continues to flatten strongly suggesting “policy error”:
US and EM high yield is struggling to make headway:
One more bullish sign is that Chinese capital flight eased significantly in February to $29bn:
Owing to currency movements we need to add $10bn but it’s still a much better outcome.
So, markets are torn between the fear of missing out and the larger issues of whether the commodity-destructive settings of improving US growth and a rising dollar plus a weakening China and falling yuan are still intact.
They are, in my view, so when it has run its course I still expect things to reverse.
