Global equity bulls were missing in action on Thursday, after weaker corporate earnings, soft economic data from China and heightened political drama in Spain encouraged investors to head to the sidelines.
In the previous editions of the Market Overview, we have already analyzed the relationship between gold and some major world currencies, such as the U.S. dollar, the euro, or the Japanese yen. But what is the link between the Chinese yuan (officially: renminbi) and the yellow metal?
A strong sense of relief was felt across financial markets on Tuesday evening, after Catalan leaders signed a “symbolic” declaration of independence, but immediately suspended its formal approval and called for talks with Madrid.
Spanish assets under pressure on Catalonia independence rumours; GBP rebounds on decent economic reports; gold remains well supported despite falling 5% from last month’s highs; FOMC speeches eyed after bank holiday weekend.
Last week at this time we were scratching our heads about how a market can elevate in the face of such tragedy. Arthur Laffer probably put it best when he said on the surface money/markets have little to do with morality. But eventually, morality will catch up to the markets. Markets had a similar sentiment when it came to the hurricanes. Initially, markets were resilient when the hurricanes hit.