Pictures of a Little Snap-Back in the Inflation Trade Today

The trend continues against the inflationists, but there has been the bullish divergence by Baltic Dry Index (per this NFTRH chart), and the inflation trade has been very oversold, after all.

BDI has been ramping while commodities (and global stocks) have been fading.

baltic dry index

Cyclical Palladium is bouncing vs. counter-cyclical Gold today.

palladium/gold ratio

Industrial Metals are getting an oversold bounce vs. Gold.

Commodities are getting an oversold bounce from the SMA 200.

The yield spread between the 30s and 5s is bumping up a little.

As nominal 30s harpoon the SMA 50 (and we should keep an eye on this and the 10yr).

While the TIP/TLT inflation expectations gauge also ramps (while TIP/IEF remains tame). Something’s going on at the long end. Maybe a Treasury inventory thing?

But anyway, the oversold inflation trade needed a bump and here it is. It’ll be interesting to see how long it lasts. Meanwhile, Uncle Buck is grinding around deciding whether to hold support at the SMA 50 or perhaps test the SMA 200. I am bullish USD beyond the short-term, and have got to abide by that. It is no longer overbought, so while I had thought a healthy test of the SMA 200 was doable, the buck is under no obligation to do so.

us dollar

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