hello and welcome back to the note
continues to be very difficult to talk
or think about markets when the news
about the geopolitical situation the
terrorist outrages in Paris is still so
fresh however markets don't seem to be
so squeamish we saw a remarkable rally
in the circumstances across European
stock markets today particularly in
France meanwhile here in the States the
SP turned down in the afternoon but
nothing too dramatic the key difference
between those two markets being of
course that the European markets closed
before the very alarming news about a
suspected planned terrorist in a tech in
Hanover came across the wires while that
happened while u.s. stock markets were
still trading more broadly away from the
stock markets I suspect in the most
significant markets for us to be looking
at at this point are for metals now if
we take a look at gold it had a very
sharp sell-off today it is now down
about ten percent from high it gains
after a rebound about a month ago it's
now at a new low for the year and as you
can see it's locked into quite a
significant downtrend you would normally
expect gold to benefit from safe haven
buying when people are worried about the
geopolitical situation at this point
people plainly aren't worried about that
instead the strength of the dollar which
goes with the belief that the Fed will
be raising rates is helping to push gold
down now if we take a look at a very
different metal copper how you read most
important of the industrial metals
that's also had another sell off today
it's now that's a fresh post-crisis low
barely any higher than it was a decade
ago think of all the growth that China
has managed in the interim it's not good
to push copper prices up plainly showing
continued very great concerns about the
world's industrial or manufacturing
economy you could also put this together
with further Falls for foreign exchange
of the emerging markets and continued
strength in the dollar
there are a number of areas where the
pressure on the fed not to raise rates
where the concern that there may be some
kind of an emerging market crisis could
be building there is also a belief which
is helping to boy stock markets that the
latest geopolitical news could give
central banks a get out of jail free
cards an excuse not to raise rates if
there's a period of high uncertainty
that there's always a good justification
not to raise rates hence we have this
rather strange picture where markets
such as industrial metals or foreign
exchange are suggesting very difficult
problems when it comes to attempting to
raise rates while stock markets are
showing equanimity asses in many ways
the gold price you could argue and I
might agree that this is really rather
worryingly a relaxed attitude by markets
to some very scary news