Friday, May 22, 2009

Recent Intermarket Relationships on the Radar





Some intermarket relationships impacting recent trading: weak stocks (top chart), weak dollar versus euro (second chart from top), strong gold (second chart from bottom), rising Treasury rates (bottom chart). Could we be looking at inflation sooner than expected? If so, that would have important implications for Federal Reserve policy, interest rates, commodities, and the prospects for sustained economic recovery.
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4 comments:

DmytrenkoAV said...

we saw some better economic data for last time, so can suppose that QE began to work. So inflation began growth

OKL said...

I agree Doc, the inter-market movements are too big to ignore, especially in the currency market.

If this continues, it wouldnt come as a surprise for greater yo-yoing in the equity markets as the currencies/commodities/treasuries market take the limelight.

bloggermauricio said...

Sorry, what do you mean, which kind of implications...

Chris said...

If QE was stimulating growth, the stock market would not be selling off in the face of a falling dollar.

QE is more likely stirring a move to hedge against USD weakness. Therefore, gold, oil, ags, and non-us currencies have benefited.