US Excess rate indicates MAJOR cycle turn ? Cost of capital RISING despite ECB and a slow FED

 

 

Interesting chart – the US "excess rate" in 10 yr. sector……hence the "cost of capital" for reserve/funding currency of choice…

 

A high – too high price of money- have a tendency to "kill growth" in rest of the world and hence spill over into lower markets, US$ and risk…..

 

Here its charted vs. the DXY index…  The excess rate follow Sinus-like progress from -50 to +50 – below/above creates reversals….

 

In other "divergence" is MAX-ed out presently…..

 

Another look here at 12 month (1 yr) – GDP weighted ….also… price of money rising..

 

 

 

Finally, credit space.. CCC – Junk has gone ballistic..

 

 

 

Even BAA – lowest investment grade keeps seeing rising yields…

 

 

Leveraged loans @ 2010/11 prices!!!!

 

 

 

 

Another divergence chart… EUR high yield vs. Global High Yield..

 

 

Med venlig hilsen  |  Best regards
Steen Jakobsen  |  Chief Investment Officer

 

Saxo Bank A/S  |  Philip Heymans Allé 15  |  DK-2900 Hellerup
Phone: +45 39 77 40 00  |  Direct: +45 39 77 62 23  |  Mobile: +45 51 54 50 00

 

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