Don’t Just Focus On Oil: Macro Charts You Must Know #24

If the slides above aren’t loading, you can read Macro Edge over here.

Interest rates and oil prices continue to capture the headlines, but are things as rosy as the rallies in both imply?

USD claws back some of last week’s losses
- At this point only GBP has managed to break out of its downtrend vs the USD
- AUD, CAD, EUR are close to breaking out, but remain in their established trends for now

Interest rates continue to rally higher
- BUT, the US yield curve still isn’t steepening, and US breakevens continue to tumble

Don’t mistake oil’s rally as indicative of a global economic boom
- While WTI surged higher and broke through its triple top ~$84, copper and iron ore prices aren’t indicating any kind of broad based global economic expansion, which is also supported by what US breakevens and the yield curve are doing
- On the contrary, if oil prices remain this high and the US yield curve keeps flattening, lower growth and higher input costs will instead become a drag on growth