Monday, January 9, 2017

OVERNIGHT RISK. OFF: Gamed By Social Mood

2016 was the year of ignoring risk - all of the world's problems were hidden in broad daylight by manic social mood. Now, all of the risks that were ignored during 2016 while gamblers were loading up, are starting to matter all over again now that they're ALL IN: China, Brexit, Oil etc. etc...

Unfortunately, this delusion doesn't go in reverse...

"Risk appetite evaporated overnight after the year's strong start, with equities retreating, oil markets roiled by a supply surge and the pound sliding on renewed concerns about a "hard" Brexit."

Oil prices on Monday posted their biggest one-day loss in six weeks amid fears that record Iraqi crude exports in December and rising U.S. output would undermine OPEC's efforts to curb a global supply addition to already thinking that it should be lower because of dollar strength."

In currencies, sterling slumped 1 percent on Monday, extending Friday's 1.1 percent slide...May's comments stoked fears of a "hard Brexit", in which border controls are prioritized over market access.

The drop in risk appetite pushed the dollar lower against the safe-haven yen.

Where to begin...

First off, a visual depiction of how overbought this market is...

Weekly TRIN (selling pressure):

British pound with USDJPY:

Speaking of dollar strength and oil...

EM currencies (red) with Oil:

Natural gas with oil:


Global commodities with global GDP growth
"Reflation" - what a fucking joke 

The Idiocracy will believe ANYTHING except reality...

Did someone say Risk Off?

Bonds versus stocks: