The markets have opened the week on a decidedly positive mood this morning. All the major stock indices are positive as are risk currencies like the Canadian dollar, which is up by 0.25%. The US dollar continues to grind lower as it has since the middle of July. There is still a lot of focus on the future price of gold as an indication of the future path of the economy. In particular, there is a minority view in the markets that we are about to see renewed inflationary pressures in the global economy. The markets are exhibiting little conviction on much of anything at the moment but one thing is clear: the short USD trade is crowded and sentiment is heavily weighed against the US dollar. That can mean that we are going to see a continual grind lower over time or conversely that we will see a quick whiplash in the other direction as soon as there is some negative economic news.
