The deflationary spiral: are we already in recession?

Posted on 27. Sep, 2011 by Riskelia in Weekly Focus

The last doubts we could express about a looming deflation threat are fading away.
First of all, the signals on commodities producers become more clear-cut; the recommendation on Gold Miners abruptly receded, conveying a bleak overall picture on the mining and oil sectors:

More generally, all bets identified by the Radar are deflationary as depicted in figure [...]

What does the emerging currencies meltdown foretell?

Posted on 20. Sep, 2011 by Riskelia in Weekly Focus

For sure, the event of the week has been another form of quantitative easing: the agreement reached by the developed countries core central banks (Fed, ECB, BOE, BOJ, SNB) to provide unlimited dollar funding to European bank.
Meanwhile, cyclical markets have responded in contrasting ways. As equities rose, credit markets were less enthusiastic and emerging currencies [...]

The dollar turns bullish: prepare for a wild move

Posted on 13. Sep, 2011 by Riskelia in Weekly Focus

Riskelia’s indicators have swiftly turned bullish on the dollar. The most striking negative trends are those of the TRY (the oldest one), the Eastern Europe currencies (the youngest one) and some key currencies linked to global growth (MXN, RUB, ZAR).

The summer financial crisis had spared the currencies so far but the recommendations on the dollar [...]

Cyclical assets signals: are we heading to recession?

Posted on 06. Sep, 2011 by Riskelia in Weekly Focus

Financial markets can provide good signals on the global economic outlook. Indeed, in a financial 1crisis such as the one we went through in August, some assets may reflect banks funding contraction and a credit crunch earlier than economic indicators. As Georges Soros put it, financial markets and the real sphere have a reflexive interaction, [...]

A journey into the gold constellation: how to play the gold theme and what does it mean today?

Posted on 06. Sep, 2011 by Riskelia in Weekly Focus

Although the gold was hit by a severe 8% correction from its peak, the weekly loss barely reached 1.3%, a mild scenario given the previous 25% run up over 7 consecutive weekly rises.
The bubble on gold is still above 70%, reflective of a herding positioning. The gold mania is exacerbated by its safe haven status [...]

A visit to h(e)aven

Posted on 06. Sep, 2011 by Riskelia in Weekly Focus

After cyclical assets last week, we turn today our attention to the haven society.

Havens are defined as assets positively or mildly impacted by sharp equity sell-offs. They are characterized by a positive or mildly negative liquidity beta (we define the liquidity beta as the mean asset return conditional on a 10%-probability equities drop; it is [...]