The charts that matter: bond investors feel the pain

In a week when Germany had to start paying to borrow money again, we take a look at how the charts that matter most to the global economy have fared.

Welcome back.

In this week’s MoneyWeek podcast, Merryn talks to Hamish Baillie of Ruffer. Hamish tells Merryn why the investment landscape has changed, and a traditional 60/40 equities/bonds split portfolio isn’t likely to cut it any more. That’s  one of the reasons  he’s bought into bitcoin in quite a big way, and why he’s still a fan of gold. Listen here.

In this week’s issue of the magazine, Matthew looks at hearing technology. It’s an often ignored part of the health sector, but it is about to move into the limelight and there have been some exciting developments. We also look at how to boost Britain's stricken economy, and look at how to buy into the potential of US small-cap stocks. Subscribe now to get your first six mags free. 

Our latest “Too Embarrassed To Ask” video looks at the difference between monetary policy and fiscal policy, the two main tools available to governments and central banks for influencing a country's economic growth. Find out more in a couple of short minutes by watching our video here.

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

Now for the charts of the week.

The charts that matter

Gold fell to its lowest since March last year, as interest rates start to rise faster than inflation expectations. 

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) arrested its recent decline.

US dollar index chart

US dollar index chart

(DXY: three months)

The Chinese yuan (or renminbi) continued broadly flat against the US dollar (when the red line is falling, the yuan is strengthening).

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 shot up to almost 1.3% as investors buy in to the “reflation” story – the belief that economic growth is coming back. According to Bloomberg, this is the worst start of a year for bond investors since 2013.

US ten-year Treasury bond yield chart

US ten-year Treasury bond yield chart

(Ten-year US Treasury yield: three months)

The yield on the Japanese ten-year bond remains low but has shot up – by its standards at least – and now sits at the dizzying height of almost 0.09%.

Japanese government bonds yield chart

Japanese government bonds yield chart

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

And, in a week when the German government auctioned some 30-year Bunds for a whopping 0.1%, the yield on the ten-year German Bund crept higher too. Still not positive, but the highest it’s been for some while.

German bund yield chart

German bund yield chart

(Ten-year Bund yield: three months)

Copper continued its rise as the new commodities supercycle story gathers pace.

Copper price chart

Copper price chart

(Copper: nine months)

And the Aussie dollar headed slightly higher on the back of stronger commodities, too.

AUD/USD currency chart

AUD/USD currency chart

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

Cryptocurrency bitcoin continues its seemingly unstoppable rise as it becomes increasingly mainstream. Ruffer’s Hamish Baillie tells Merryn in this week’s podcast why he bought a big chunk of it not so long ago. Listen to that conversation here.

Bitcoin price chart

Bitcoin price chart

(Bitcoin: three months)

US weekly jobless claims rose to 861,000, compared to 848,000 last week (revised up from 793,000) – a four-week high and almost 100,000 more than analysts had expected in a Reuters poll. The four-week moving average fell  by 3,500 to 833,250 from 836,750 (revised up from 823,000) the week before.

US weekly jobless claims chart

US weekly jobless claims chart

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

The oil price (as measured by Brent crude) jumped even higher this week to just over $64, before dropping back a little at the end of the week.

Brent crude oil price chart

Brent crude oil price chart

(Brent crude oil: three months)

Amazon recovered some of last week’s losses.

Amazon share price chart

Amazon share price chart

(Amazon: three months)

Tesla slipped this week, too and looks to be drifting lower – something that could easily accelerate as market conditions turn.

Tesla share price chart

Tesla share price chart

(Tesla: three months)

Have a great weekend.

Ben

Recommended

Julian Brigden: markets are at a huge inflexion point
Investment strategy

Julian Brigden: markets are at a huge inflexion point

Merryn talks to Julian Brigden of Macro Intelligence 2 Partners about the unwinding of the US stockmarket's super-bubble, and the risks and opportunit…
25 Jan 2022
Has growth investing had its day? Don’t be so sure
Growth investing

Has growth investing had its day? Don’t be so sure

Markets – and “jam tomorrow” growth stocks in particular – continue to crash, with some analysts forecasting a 50% drop or more. But, says Max King, a…
25 Jan 2022
A cheap investment trust with a good record
Investment trusts

A cheap investment trust with a good record

This cheap investment trust’s yield of almost 9% may look too good to be true, but should be sustainable, says Max King.
25 Jan 2022
Tax return deadline extended – but don't forget to file
Income tax

Tax return deadline extended – but don't forget to file

HMRC is being slightly more lenient about tax returns this year, but falling behind will still incur hefty fines.
25 Jan 2022

Most Popular

Shareholder capitalism: why we must return power to listed companies’ ultimate owners
Investment strategy

Shareholder capitalism: why we must return power to listed companies’ ultimate owners

Under our system of shareholder capitalism it's not fund managers, it‘s the individual investors – the company's ultimate owners – who should be telli…
24 Jan 2022
Three innovative Asian stocks to buy now
Share tips

Three innovative Asian stocks to buy now

Professional investor Fay Ren of the Cerno Pacific Fund highlights three of her favourite Asian stocks to buy now
24 Jan 2022
Ask for a pay rise – everyone else is
Inflation

Ask for a pay rise – everyone else is

As inflation bites and the labour market remains tight, many of the nation's employees are asking for a pay rise. Merryn Somerset Webb explains why yo…
17 Jan 2022