Thursday, May 5, 2011
If you read my blog from this past Sunday the events over the last few days should not be surprising. The dollar, that know body wanted, soared today with the Euro off almost 3 cents. The European Central bank said that it was not going to increase interest rates in June as was widely expected left traders disappointed.
Crude oil was off just under $10 at $99.99 down from $113.79 on April 28. Gold closed down $43.90 on the day, yes that is $43.90 in one day. Gold if off almost $100 per oz. since last Friday. Silver prices dropped over 12% today. Only two commodities were up for today, wool and lean hogs it was a very significant rout of all the commodities. The yield on the 90-Day T-Bill was 0% and perhaps the most interesting thing of all was that you had to pay the government 50 basis points to buy the 5 year TIPS. The yield is minus 40 basis points
So, did the inflation trade fall off the shelf today? a couple of days doesn’t make a trend, but if we follow through with a downward bias into Friday a lot of people will be very nervous about going into the weekend short anything.