The Macro Charts You Must Know #19
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The week in a nutshell:
- The USD continued to rally against major currencies, in what is looking like a broad based rally
- CNY remains the exception, and is still trading firm vs the Dollar, which is strange considering that China’s real estate sector is fighting to survive the Evergrande contagion
- The US yield curve remains flat even as long yields and breakevens move higher in anticipation of higher inflation – are we headed into a future of low growth and high inflation?
- The German yield curve is also flattening, in contrast to France and Italy. Could this be a leading indicator of lower European growth rates?
- Commodity prices are also starting to move lower
- Copper and Aluminium are off their highs, although oil prices remain elevated
- A stronger Dollar coupled with flatter yield curves and higher inflation is not a combination that leads to higher global growth, quite the opposite actually
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