Good morning, 

During the last 24 hours almost everything has been rallying: futures worldwide, Gold (1.43%), Silver (+2.42%), Commodities related currencies (AUDUSD +1.72%, USDCAD -1.37%). Happy days seems to have never gone away.

Main cause has to be researched in the PANIC BUYING in 10 years US Government Bonds, down 9 Basis Points yesterday from 0.72% to 0.63% -and that is quite a lot. Being the mark already very low, don’t forget that ON officialy rates are set in a 0-25bps range and the CURVE is still quite STEEP (positively inclined, this is something quite beneficial to the financial sector): that means that -even if quite surprising- there could still be room to the downside. 

At the same time, this also means that smart money (Bond Guys) is not buying the inflation story, thinking that the value of their fixed income holdings will not be erased by an eventual surge in prices: if you stop to think about it, this is quite the opposite to what precious metals (and bitcoin, btw) are indicating. Follow the bonds.

USD has been weakening

Today, the EuroGroup is meeting and the EU Commission is expected to make it less stringent for countries using ESM funds in which it will not require a macro-adjustment programme.

Later, US NFP and Unemployment rate are going to be disclosed: it will be the worst number ever on records, or at least of the last 50 years. But we already know it.

Ciaoo

Marco Turatti
Technical Analyst

TIO Staff
Author

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