The Gryning Times

Daily Market Macro View - Wednesday 8 July 2020

I’ve previously discussed Inflationary and Deflationary factors taking hold of the Capital Markets, and last Tuesday we had Inflation data confirming the rise in wages and the rise in input prices.

Two Inflationary charts I’ve discussed before;

GOLD has now cleared the way for a run to 2011 highs of over $1900, and is unlikely to stop there. With trillions of dollars of new global money floating around, gold has all the ingredients for a double, or more, from here.

COPPER, another inflation-signalling commodity, seems to be setting up for a technical break in the days ahead.

Factoring in the above two charts, the predictable (if unintended) incentives of the Federal Unemployment Subsidy are now being exposed - as employers are having trouble competing with the government to get employees back to work. Low wage workers have been given a glimpse of what the government deems to be a living wage, and it’s higher than what they were making at work, a higher wage is now demanded to return to work.

One of the many contributors to upward pressure on prices.