Juggling Dynamite

This morning copper has broken through 3.50 to trade slightly below the cyclical support which has been in place since the economic recovery began in 2009. A barometer of global demand, this breach if it holds, has traditionally been a leading indicator for the risk market cycle. This time different?

Chart source: Cory Venable, CMT, Venable Park Investment Counsel Inc.

Bonds and the US dollar seem to be agreeing with copper’s pessimistic assessment of near-term prospects for global growth. Both are continuing to attract international inflows as a relative safe haven in a world of increasingly wildcard risks. The much fabled “great rotation” out of US bond markets is so far non-existent.

Chart source: Cory Venable, CMT, Venable Park Investment Counsel Inc.

Meanwhile the strengthening US dollar is an increasing dead weight on the translated earnings of US multi-national firms. See: US firms brace for a Wallop, Weak Yen and Euro threaten to take a major toll on Exporters’ sales this quarter.

Athanasios Orphanides, former governor of the Central Bank of Cyprus, talks about a proposed unprecedented levy on Cyprus’s bank deposits and the potential impact on Europe’s financial systemHere is a direct link.

At least some cartoon artists are prepared to acknowledge the reality of the “Too big to jail” and corporate welfare system that governments and Central banks are charging to the tab of us taxpayers.