Impunity hidden behind lies is what defines Obama’s Presidential legacy. To call his legacy "zero" is actually unrealistic praise; his legacy is deeply negative. He’ll be rewarded handsomely for it, by his masters - which never were the American public.
With the US dollar soaring to its highest since 2003 (up 10 days in a row), unprecedented moves in the Euro, Yen, and Yuan are now daily headine-makers. Overnight saw USDJPY near 111.00 (before rolling over a little this morning), pushing the pair to its best 2 week gain since 1988... and its second best 2-week gain since currencies floated.
Gold tends to rise when interest rates rise as was seen in the 1970s and again from June 2003 to June 2007 (see table) when interest rates rose from 1% to 5.25% and gold rose from $346 to $651 per ounce.
There was an awful lot of cheering about the recent retail sales report which showed an uptick of 0.8% which beat the analyst’s estimates of 0.6%. However, if we dig deeper behind the headlines more troubling trends emerge for the consumer which begins to erode the narrative of the "economy isdoing great" and “there is no recession" in sight.
Janet Yellen signalled that the US central bank is reluctant to delay its next increase in short-term interest rates "for too long", warning that keeping rates on hold could spur excessive risk-taking and adding that a rate hike could be appropriate "relatively soon." Yellen is due to say on Thursday morning that as the Fed sees the case for a rise in rates continuing to strengthen it "must remain forward looking in setting monetary policy".
Global bond yields and the dollar both weakened after the Bank of Japan offered to buy an unlimited amount of debt at fixed yields, stabilizing the global bond rout, while investors awaited testimony from Fed Chair Janet Yellen that will help shape the outlook for interest rates ahead of a December rate hike that is now seen as near certain.