Monday August 28, 2006 - 10:30:27 GMT
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Black Swan Capital - www.blackswantrading.com
Crude vs. the buck...
â€˘ Key Reports (WSJ):
10:30a.m. Dallas Fed Mfg Production Index. Previous: 9.4.
12:00p.m. Chicago Fed Midwest Mfg Index. Previous: +0.7%.
The early bird gets the worm, but the second mouse gets the cheese.
Still one of the most interesting relationshipsâ€”crude to the US $ Indexâ€¦who leads and who follows is the question? The chart below compares crude oil futures to the inverted US $ index. They continue to move in a similar pattern i.e. rising oil means weakening dollar, falling oil means strengthening dollarâ€¦a wee bit of divergence of late it seems.
The next question: Given what weâ€™ve seen in the mid-east, a serious war, why didnâ€™t crude blow-off to the $100 per barrel level on the lips of so many analysts? Might the fall in oil prices, or the inability of it to move higher on a very fertile geopolitical background have something to do with slipping expectations for global growthâ€”and we dare say it, the rising potential for â€śglobal deflationâ€ť?
Do the 10-yr note and $-yen add anything to the equation?
Jack Crooks, Black Swan Capital Black Swan Subscription-based Service
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