A Friday Ramble of Doom

A couple of years ago, as the credit crunch was starting to crunch, we showed two charts that suggested bad news ahead. One was the US Current Account graphic showing an improvement that started over a year before the credit crunch hit, suggesting at the time credit was already draining out of the global economy. The second was the Fischer Debt-Deflation Theory.

A Trade Balance Quickie: UK and Canada

The Bank of England made no change to its benchmark interest rate; and they made no comment about the economy in the wake of this week’s monetary policy meeting. No surprise there.

The British pound, however, was already under pressure because of a larger than expected trade deficit reported today. Here are some key points from Reuters:

Gold is telling us something ... as usual

In our webinar yesterday, we showed a chart comparing gold and the US dollar index, as you can see below:

The risk to mere consolidation: euro

As we finished up last week with US Nonfarm Payrolls, we were left with a taste of risk-taking. US stocks breached resistance and the dollar flopped, barely holding on above support.

Now starting this week we wouldn’t be surprised to see some sort of consolidation (pullback, or sideways move) ... as major data reports are sparse. There have been and will be, however, central bank meetings and decisions. The Bank of Japan and the Reserve Bank of Australia are already out of the way with barely a ripple in the markets to show for it. The Bank of England and Bank of Canada are on tap later in the week. The Bank of Canada has the most potential to stir things up, at least for the Canadian and commodity dollars.