The charts that matter: a tale of two central banks

Government bond yields slipped around the world this week. Here’s how that has affected the charts that matter most to the global economy.

Welcome back. 

This week, we’re looking at a very exciting new sector. As you’re probably aware, there has been a lot of focus on the meat industry recently, especially over its carbon emissions. So, what can you do if you’ve got a taste for prime steak but would rather leave the animals out of the equation altogether? Enter lab-grown meat – ”cuts of meat that have involved no cruelty to the animal or harm to the environment, having been cultured from harvested animal cells in a laboratory”. Stuart Watkins looks at the state of the industry now and how investors can get a taste.

Elsewhere, Stephen Connolly casts his eye over another relatively new industry - the burgeoning “buy now pay later” sector that includes start-up companies including Klarna and Clearpay. But it’s not just startups, the big names are also showing an interest. Stephen picks some of the best stocks in the sector for you to consider. 

If you’re not already a subscriber, sign up here and get your first six issues free

Merryn is joined by Dale Robertson in this week’s podcast. Dale is co-manager of the Chelverton European Select Fund, and he tells Merryn why it’s such an exciting time to be investing in Europe, especially in small and micro-cap stocks. Listen to what he has to say here.

Here are the links for this week’s editions of Money Morning and other web articles you may have missed:

Now for the charts of the week. 

Gold is hovering at around $1,800 an ounce. Having slid earlier on the back of positive US economic data, the yellow metal recovered after the Federal Reserve was a little more dovish than expected, and the Bank of England was a lot more dovish than expected – implying that developed world central bankers aren’t quite as ready to hike rates as everyone had perhaps started to believe.

Gold price chart

Gold price chart

(Gold: three months)

The US dollar index (DXY – a measure of the strength of the dollar against a basket of the currencies of its major trading partners) had a mixed week after the Fed started “tapering” its quantitative easing programme.

US dollar index chart

US dollar index chart

(DXY: three months)

The Chinese yuan (or renminbi) strengthened against the US dollar (when the red line is rising, the dollar is strengthening while the yuan is weakening). 

USD/CNY currency chart

USD/CNY currency chart

(Chinese yuan to the US dollar: since 25 Jun 2019)

The yield on the ten-year US government bond slipped.

US Treasury bond yield chart

US Treasury bond yield chart

(Ten-year US Treasury yield: three months)

The yield on the Japanese ten-year bond fell hard (bearing in mind that we’re still talking just a few basis points – one basis point being 0.01 of a percent – here).

Japanese government bond yield chart

Japanese government bond yield chart

(Ten-year Japanese government bond yield: three months)

And the yield on the ten-year German Bund retreated, too. 

German Bund yield chart

German Bund yield chart

(Ten-year Bund yield: three months)

Copper prices continued to fall. 

Copper price chart

Copper price chart

(Copper: nine months)

The closely related Aussie dollar fell in sympathy. 

AUD/USD currency chart

AUD/USD currency chart

(Aussie dollar vs US dollar exchange rate: three months)

Bitcoin is off its all-time high but is still holding out at over $60,000. 

Bitcoin price chart

Bitcoin price chart

(Bitcoin: three months)

US weekly initial jobless claims fell by 14,000 to 269,000. The four-week moving average fell by 15,000 to 284,750. Meanwhile US non-farm payrolls were a good bit stronger than expected.

US initial weekly jobless claims chart

US initial weekly jobless claims chart

(US initial jobless claims, four-week moving average: since Jan 2020)

The oil price fell, sliding back from its recent highs despite oil cartel Opec promising to keep production at current levels. 

Brent crude oil price chart

Brent crude oil price chart

(Brent crude oil: three months)

Amazon's stock saw another big rise as both the Nasdaq and the S&P 500 hit new records. 

Amazon share price chart

Amazon share price chart

(Amazon: three months)

Tesla continued its apparently unstoppable climb. 

Tesla share price chart

Tesla share price chart

(Tesla: three months)

Have a great weekend. 

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