There were just two reports this week among those I track, in addition to the banking stats:
- Durable Goods (DGORDER): -15B (-5.15% m/m); decline after a new all-time high.
- Median New Home Sale Price (MSPNHSUS): 437k +20k (+4.58% m/m); rebound after 12-month $80k decline.
- Bank Credit (TOTBKCR): +7B (+0.04% w/w); flat, deflationary.
- Fed Balance Sheet (WALCL): -6.7B (-0.08% w/w); deflationary.
It was a mixed bag – there were some positive results, but bank credit and Fed actions are still pointing at deflation.
The big news this week: the BRICS meeting, held in South Africa. Long story short: no gold-backing (or “linking”), no BRICS currency, but a lot of new nations joined the BRICS club. We can see in prices that some markets may have been expecting a bit more than this. How do we know?
This week, the buck moved up 0.74 [+0.71%] to 104.01, a new 12-week closing high. Other currencies: EUR: -0.70%, GBP: -1.19%, JPY: -0.79%. Most of the gains in the dollar came on Thursday. Big Money seems to be saying that there is no near-term change coming out of the BRICS. So while Senile Joe and his set of Handlers seem hell-bent on destroying the US, so far at least, BRICS will not be the replacement. Yet. That said – the dollar move has been mild-but-positive, all things considered. The dollar is now in a solid uptrend.
For its part, the RMB inched higher (fell slightly) to 7.29, a barely measurable move. “De-dollarization”, if it is happening, isn’t causing the world to rush into the RMB as a response. This is more “Big Money” evidence that the BRICS process will be a slow one. Will trade now start to happen in BRICS-nation currencies, like INR and RMB? If so, this will show up – eventually – in currency prices. There are also considerations within China as well – explained below.
Despite the strong dollar, gold did very well, moving up 23.40 [+1.22%] to 1939.90. Gold/Euros naturally did even better, rising 1.93% and it is back in an uptrend in all 3 timeframes. The dollar rally doesn’t seem to have slowed gold down at all.
by westcoastjan