The US dollar declined this week, showing up both in forex markets and across a wide range of asset markets, most conspicuously stocks and commodities. Treasuries declined, both in nominal and real terms. This is in line with recent SS forecasts, which show this trend generally in effect until October 1. But that would be putting too fine a point on it … it’s uncommon for SS to nail a major trend change within a couple weeks, let alone a day. At the same time though, there is no bias in one direction or the other, so the odds that SS will be early or late are the same. And the takeaway remains that SS sees the bear market in bonds as at or near its bottom and that rough sledding for stocks lies ahead.
SS revised its Copper outlook more bullishly this week. How meaningful this is is an open question … the copper outlook has been more volatile than for the other assets, which is usually an indication of greater uncertainty. So let’s put this one in the more speculative column and see how it comes out the other side of the expected macro trend change before investing it with significance.