The charts that matter: it’s all about the US dollar

As the US dollar continues to bully the currency markets, John Stepek looks at all the other charts that matter to the global economy.

Welcome to your weekend edition, where we take a look through the charts that matter and catch up on anything else that we missed during the week.

If you missed any of this week's Money Mornings, here are the links you need.

Monday:Oil producers are pumping harder but don't expect oil prices to slide

Advertisement - Article continues below

Tuesday:Expect global trade tensions to get worse before they get better

Wednesday:Don't panic this is a time for sitting tight, not selling fast

Thursday:Is China's bear market a major threat to your portfolio?

Friday:Is value investing finally set to see a long-overdue comeback?

We haven't recorded a new podcast this week, but if you haven't listened to the most recent one yet, then you'll find it here.

Now over to this week's charts.

Gold is having a miserable time of it. Bearishness on the yellow metal is pretty high and despite various bits and pieces of geopolitical turmoil it can't catch a break at least, not against the US dollar. As I always say, it's worth having some in your portfolio. It's a good diversifier, and it's decent insurance against most of the things that could potentially go wrong in the financial world right now.


(Gold: three months)

Advertisement - Article continues below
Advertisement - Article continues below

The US dollar index a measure of the strength of the dollar against a basket of the currencies of its major trading partners continues to be strong.


(DXY: three months)

The yield on the ten-year US Treasury bond was again, little changed this week.


(Ten-year US Treasury: three months)

The yield on the ten-year German bund the borrowing cost of Germany's government, which is Europe's "risk-free" rate slipped a little, along with the US yield.


(Ten-year bund yield: three months)

Copper continued to slide, partly due to fears over Chinese growth but mostly due to the strengthening US dollar.


(Copper: three months)

Bitcoin is steadily heading lower. It's definitely not the must-have asset anymore. The only question seems to be: how low can it go?


(Bitcoin: three months)

On US employment, the four-week moving average of weekly US jobless claims rose slightly to 222,000 this week, while weekly claims rose to 227,000.

Advertisement - Article continues below

According to David Rosenberg of Gluskin Sheff, when US jobless claims hit a "cyclical trough" (as measured by the four-week moving average), a stockmarket peak is not far behind (on average 14 weeks), and a recession follows about a year later.

We hit a new trough last month, so if there's anything to Rosenberg's observations (which are of course drawn from a limited pool of past cycles), then we should see the stock market hit new highs before this cycle is out.


(US jobless claims, four-week moving average: since January 2016)

The oil price (as measured by Brent crude, the international/European benchmark) has jumped this week. Oil cartel Opec agreed to raise production. However, it looks as though the increase will not be enough to meet both growing demand, and to deal with the supply that will be lost due to Iranian sanctions.


(Brent crude oil: three months)

The arch-disruptor Amazon continues to bestride the US stockmarket. The company announced this week that it is buying an online pharmacy, called PillPack. Signs of Amazon taking another step into the healthcare market battered the share prices of other pharmacy groups. No one wants their industry to be disrupted although consumers love it.


(Amazon: three months)

Electric car group Tesla had a remarkably quiet week, share-price-wise. This week, Elon Musk got into a Twitter spat over a farting unicorn.

No, seriously.


(Tesla: three months)

Have a great weekend.





A bond is a type of IOU issued by a government, local authority or company to raise money.
19 May 2020
Commodities look cheap

Commodities look cheap

Gold may be on a bull run, but industrial commodities, including copper, zinc and aluminium, remain cheap.
17 Jan 2020
How long can the good times roll?

How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019
The British equity market is shrinking

The British equity market is shrinking

British startups are abandoning public stockmarkets and turning to deep-pocketed Silicon Valley venture capitalists for their investment needs.
8 Nov 2019

Most Popular

Gold bugs' dreams are coming true – but we could still see a V-shaped recovery

Gold bugs' dreams are coming true – but we could still see a V-shaped recovery

John and Merryn talk about how it's perfectly reasonable to expect a V-shaped recovery and to continue holding gold as well. Plus, inflation, staycati…
30 Jul 2020
UK banks have had a shocking week – so it’s probably a good time to buy
UK stockmarkets

UK banks have had a shocking week – so it’s probably a good time to buy

Lloyds Bank reported a £676m loss this week. And, with all of the UK's high street banks having a terrible time of things, bank stocks are detested ri…
31 Jul 2020
The charts that matter: gold finally sets a new record high 
Global Economy

The charts that matter: gold finally sets a new record high 

As gold surges past its previous high, John Stepek looks at how it's affected the charts that matter most to the global economy.
1 Aug 2020