Daily Market Commentary 26th July 2021

US Share markets rallied again, to close out the week in the black, following the massive sell-off Monday. Equities cannot resist the unheralded QE infinity. Banks are flush with money and asset bubbles are exploding. The only concern is inflation and this is largely ignored and data manipulated. The Fed now completely disregards US CPI data (which has already been castrated) and is now downplayed, with the Central bank now gauging inflation through the CPE number. This is a metaphor for the politics in the USA.

Markets are flying on Central Bank largesse and this bubble will certainly burst. Global deficit/debt has exploded to unprecedented levels and the Piper must be paid. Asset bubbles, across most classes, are a reflection of the corruption of currencies and the ‘Modern Monetary Theory’, which will be exposed. The day of reckoning is anon. The EU economy has been destroyed by the pandemic lock-downs and the socialist political system and the EURO reflects this. There is no growth, thus little inflation, but plenty of cost-of-living price rises for Herr Jan Doe. The EUR is mortally wounded, trading at 1.1770, while the GBP attempts a futile recovery at 1.3730.

US Dollar strength is relative and commodity prices reflect the dwindling value. The commodity currencies do not reflect the strength of the asset prices, which is a major red flag. Virus paranoia and political bed-wetting are destroying global economies and even manipulated economic data, will confirm that. The NZD struggles around 0.6970, while the AUD has crashed to 0.7360, amidst the political lock-downs. Inflation is still the canary in the mineshaft, which will be reflected in bond yields, one of these days?