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