Last week I theorized that Donald Trump’s insane bluster over Iran and the JCPOA could be the catalyst for a massive rally in the U.S. dollar. This rally would touch off global contagion as bond yields around the world blow out to the upside.
Yesterday’s 10 basis point drubbing of the U.S. 10-year Treasury Note and simultaneous sell-off of both Gold and the euro below technical levels confirms this analysis. This morning we’re getting follow-through action in the Italian bond market, as the belly of the yield curve rises a massive 13-15 basis points.
Gold dropped $30 slicing through the $1300 level like it wasn’t even there. That’s a real sign of dollar illiquidity. Don’t be surprised if there is more shenanigans in the near term to attempt to hurt Russia, Turkey and Iran through the value of their gold holdings.
This morning we add Kim Jong-un artfully and bluntly telling National Security Advisor Crazy John Bolton to go stuff it. He holds the winning hole cards in this upcoming summit, not Bolton.
Hang on, things are getting hairy and Trump’s ego is turning all of us into Chewbacca, as we try and pilot our way through this world spinning quickly out of control.
Emerging Markets are Getting Crushed and the Dollar just Started Rising:
https://www.zerohedge.com/news/2018-05-15/trader-warns-emerging-markets-arent-heavy-theyre-setting-implode
Gold Below $1300. Ugly Technical Breakdown:
U.S. Dollar is Rallying: Right on Schedule
https://www.investing.com/quotes/us-dollar-index
Emerging Markets Hit with Biggest Outflows since 2016
https://www.zerohedge.com/news/2018-05-11/emerging-markets-hit-biggest-outflows-december-2016
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