With the dollar moving higher along with most global stock markets, today a legend in the business sent King World News a powerful piece that contains an important note from Peter Boockvar.
October 15 (King World News) – From Art Cashin’s note: Overnight And Overseas – Global markets are mostly higher as the Tan Book reinforced the Fed delay syndrome. Shanghai was up over 2% and Japan and South Korea rallied over 1%. The rally mode continued into Europe, where most markets are up over 1%.
Despite the dovish look on the Fed, the dollar is a bit firmer, possibly on comments from Mr. Nowotny of the ECB. Most metals are firm with gold setting up for a potential breakout move. Oil is off only a little, despite a huge surge in inventories. Grains are generally softer.
Another Person’s Perspective – My friend, Peter Boockvar, over at the Lindsey Group, took note of Mr. Nowotyn’s comments. Here’s how Peter saw it:
The euro is lower after ECB member Nowotny said this on inflation, “one has to say that we’re clearly missing our target…the main fault for this is the dramatic fall in the price of oil and raw materials. One has to say that these are elements the central bank cannot influence, but also core inflation rates are clearly below our target.” Core inflation by the way is just one tenth from matching the highest in two years because of services. Who knows what this implies relative to their QE program which still has another 11 months to run but the central bank obsession with 2% inflation is certainly persistent globally.
Nowotny also did his best to lay off some of the blame on modest growth to individual government’s saying “it is quite obvious that in the current economic situation additional sets of instruments are necessary, these include structural measures.” Also, the Bank of Spain Deputy Governor said the ECB “could extend QE if inflation is not compatible with their goal.” It will be the supply side of the commodity curve that will bring the inflation many central bankers want, not doing the same thing over and over again and expecting a different result.
Consensus – Futures are trading better on global green streak. Traders here will watch crude to see if that inventory spike will bring lower prices. Bulls managed to hold 1990 but need to build on that to restart the up move. Initial Claims could set the tone. Fedspeak looks like mostly reruns. Stick with the drill – stay wary, and very, very nimble.”
***ALSO RELEASED: A Remarkable Look At The War In The Gold And Platinum Markets CLICK HERE.
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