“As we highlighted in our conversation in May 2012 – “Risk-Off Correlations – When Opposites attract”: Commodities and stocks have become far more closely intertwined as resources have taken on a greater role with China’s economic expansion and increasing consumption in Emerging Markets.
In numerous conversations, we pointed out we had been tracking with much interest the ongoing relationship between Oil Prices, the Standard and Poor’s index and the US 10 year Treasury yield since QE2 has been announced.
Looking at the recent weaknesses in commodities such as oil and copper, one could decently argue that the time might have come to take a few chips off the gambling table.
This feeling of “uneasiness” seems to be shared by Bank of America Merrill Lynch which indicated on the 21st of February the following important points:…”
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