Open: London Session | Forex, Metals, Oil, Agriculture March 18, 2021



In other words, it is the number of times one dollar is spent to buy goods and services per unit of time. The same applies to the usual cohort of assets that benefits from reflation and a weak dollar: commodities, emerging markets, cyclical industries. The leap at 2 p.m. in New York, when the Fed s statement came out, was palpable: The dollar was less enamored.


In the article mentioned above I showed how the price of gold has some distinguishable cyclical and profitable patterns when compared to other metals. The concept of store of values is further challenged by the performance of gold compared to the S&P 500. Gold, however, has an interesting and possibly profitable pattern when compared to other metals. In his writing and research, Sumner specializes in monetary policy, the role of the international gold market in the Great Depression, and the history of macroeconomic thought.
The article examined the relationship between the price of gold and the business cycle and other commodities. There are times, however, when gold prices suffer a prolonged decline. The decline in the lines in the graph says SPY has outperformed gold from 2012 to 2020. Throughout the centuries gold has been the premier investment to protect a portfolio from the ravages of inflation. This performance challenges the concept of gold as a store of value.
Gold has outperformed SPY – the lines in the graph were rising – from 2009 to 2012.


So TIPS spreads need to be adjusted downwards by at least 25 basis points to get a crude estimate of market PCE inflation forecasts.

United States

The downside to this for markets, of course, is that it also implies the Fed might need to raise rates sooner than expected. Powell said current policy was appropriate and there is no reason to push back against the rise in Treasury yields, which hit pre-pandemic levels before the Fed’s announcement. Fed sees higher growth; US 10-yr yield pares rise after Fed statement A gauge of global stocks gained on Wednesday and the US. On the next day, its Nasdaq stock soared 11.04%, propelled by a combination of solid financials and a marketwide stocks pullback.
Differences are highlighted:So there is now a reference to an upturn, Covid-19 continues to be the Fed s greatest concern, and inflation continues to run below 2 percent. When the Fed thinks it needs to adjust, Powell said, we ll say so, and we ll say so well in advance of any actual taper. “If the Fed isn’t going to induce tightening, it’s very bullish for risky assets,” said Teresa Kong, head of fixedincome and portfolio manager at Matthews Asia.
Markets across Asia are staying positive, thanks to the Fed comments. As a result, it wouldn t meet the standard for the Fed to shift from its projected path on monetary policy. This is all consistent with the Fed’s 2% AIT framework, as some make-up is required for the 2020 undershoot of 2% inflation.


Highly contentious vaccine passports are now on the EU agenda, in a bid to make it possible for these countries to welcome some tourists this summer. But the EU is for now mostly reliant on AstraZeneca (as is the U.K., where the vaccine continues to be rolled out). John AingerWhat s HappeningVaccine Fight | The EU s vaccine problems don t end there. Continental Europe can ill-afford to do without it.This grows even more uncomfortably apparent when we looks at the figures for cases in the EU.