Tuesday, January 17, 2012

Risk Markets and Decorrelation from the EURO?

Past few sessions has seen the EURO lingering - the downgrades seem to have a muted effect on equity markets, as it was projected a long time ago.

Seen a lot of pundits come on the record to say the Euro is going lower, but at 1.26 - 1.27 seems to have some strong support - my position got stopped out, and I will concentrate on my equity long positions before I can take another stab at this.

Oil and Gold both seem to be going higher after some consolidation in oil the past few days, might see the price remain above 100 over the next few weeks - and Gold after freaking out a lot of the short term traders, seems poised for another run at 1800 -  I am heavily betting on the gold miners making a strong comeback this year.

Despite the china slowdown, I just can't see the major commodity producers going much lower this year, given how low the prices are.  FMG came in with production numbers better than expected 19% lift over the qtr, and  China topping 8.9% gdp better than the expected 8.7%.  

It's only a matter of time before the euro mess becomes a moot point for the rest of the world, and we see higher prices in risk assets.