Market Action

  • The IMF’s Global Financial Stability Report indicates that the one of the biggest dangers now is bank profits.
  • Comex gold dropped significantly on Wednesday. Barrick, Freeport-McMoRan, and Goldcorp all reported bad news that day.
  • Deutsche Bank might have negotiated a settlement with the US Department of Justice down from USD 14 billion. They have said that they intend to shed another 1,000 jobs, beyond the 3,000 in June. The parallels between Deutsche Bank now and AIG in 2008 continue.
  • The GBP experienced a 6.1% flash crash in two minutes during Asian trading overnight Friday. Algorithms are blamed, but there are no real explanations.
  • The United Nations’ Food and Agriculture Organization said that global food prices have increased 10% year over year, led mainly by the cost of sugar from Brazil. The index is still well below the level at the start of the “Arab Spring/Winter”.
  • Theresa May, Britain’s prime minister, has said that she would trigger the formal process for Brexit by the end of March 2017. The pound fell to a new low against the dollar.
  • India’s central bank cut its key interest rate by 25 bp, to 6.25%. And the Indian government declared a tax amnesty that brought in USD 9.8 billion.
  • The US employment numbers were well below consensus, and unemployment has climbed to 5%. Fed vice chair Fischer described employment as close to a Goldilocks number.


This Week from Blacksummit

Complacency, Deflationary Bulls, and Inflationary Bears: Japanification in an Era when the Enemy of my Enemy is still my Enemy

John Charalambakis


Recommended Readings

Bill Gross warns financial markets have become “a Vegas casino”

George Magnus on interest rates


Image of the Week

The declining fortunes of the British Pound vs. the USD