Jack the Pipper

As you may know, the emerging market (EM) currencies have been crushed over the past year, some over the past two years. Some appear to be interesting setups now.

It seems Eurozone economic numbers are improving. The usual suspects have declared the Eurozone has healed from its deep credit crunch and self-inflicted wounds. But has it really? Or is this just another period of moderate stabilization before the next storm?

“I hope you’re ‘milking’ the New Zealand dollar for everything it’s worth!”

Gold took a knockdown punch at the start of Round 1 when I suggested gold could be bottoming soon. Gold proceeded to fall another 8% in the days following those comments.

To show a market correlation is to show a market correlation. That is about it. The reason I say that is because we can never really be sure which of the pieces of price data in the correlation is leading and which is following.

Countries have interests. Most have allies. All have enemies(real, perceived, and of the manufactured variety). In times of economic turmoil enemies appear more menacing. The normal jockeying for position by a country during the good times, may often be perceived as a threat (or opportunity to manufacture a threat) by another during the bad times.

It’s the nature of financial news media — they have to look for explanations; they have to find reasons; and they have to be first to break the news.

10-yr bond price summary this morning: Italy -1.16%; Spain -1.61%; Greece -2.91%; Portugal -9.49%

Considering the technical setup of some individual commodities, I can’t help but think this is very much a “catch the falling knife” type of forecast (which JPM too acknowledges very briefly). But it’s not necessarily a bad idea unless your hand (or someone else’s) gets sliced off.

The weekly charts below (shared with our forex service members yesterday) continue to support our view the US dollar is in a longer term bull trend against the pack…