With the Dow surging along with the price of crude oil, major trouble is brewing in Europe.
Major Trouble Brewing In Europe
May 21 (King World News) – Here is what Peter Boockvar had to say as the world awaits the next round of monetary madness: “Giuseppe Conte is the new PM of Italy of the 65th Italian government since WWII. I never heard of him. He’s a law professor and not a politician. He’ll be more of a figure head dealing with a populist agenda. That populist focus is what has markets up in arms. The French Finance Minister said yesterday,
“If the new government takes the risk of not respecting its commitments on debt, the deficit and the cleanup of banks, the financial stability of the entire euro zone will be threatened.”
What he didn’t mention is that this possibility would coincide with the end of ECB QE and NIRP next year.
The sharp selloff in Italian debt continues today. The 2 yr yield is up another 7.5 bps to +.17%, the highest since August 2015 and has basically given back nearly 3 years of declines in a week. A week ago Friday it was at -.28%. Did someone once say ‘risk happens fast’? The 10 yr yield is up by 5 bps to 2.28%, up 40 bps in 6 trading days and just 10 bps from the most since October 2014.
Italian 2-Year Yields Continue To Spike Higher!
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Boockvar continues: “The US dollar strength continues but so does the rise in commodity prices, thus for now breaking that close inverse relationship and I believe highlighting the underlying bid to commodities generally. We keep focusing on oil specifically but food prices all of a sudden are at 9 month highs. Corn today is near a 2 yr high. Copper is up 1.3% on the China/US Mnuchin comment as are soybeans too. Aluminum is around unchanged.”
King World News note: Inflation and potential financial instability in Europe are just two of many catalysts that may send the prices of gold and silver soaring. Time is on the side of the bulls. Remain patient.
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