The equity market remains in a holding pattern, while interest rates continue to decline this week. The 10-year rate fell another three basis points today, following yesterday’s decline of 4 basis points. There hasn’t been much data this week or in the form of headlines that should be sending rates lower, and inflation expectations have moved sharply higher in recent weeks. We will have to see what happens should the 10-year test support again around 4.35%, clearly if support breaks, rates are going lower, and the view could just be wrong. I would admit, though, that it would seem odd, given what we see in inflation expectations.

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The one potential area that could be having a bigger influence and dragging rates lower is the decline in oil prices over the past few days.

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Copper made a new closing high today.

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Meanwhile, gold is very close to breaking above resistance at $3,450 and exiting the ascending triangle.

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After appearing to break out of a falling wedge, the dollar is now threatening to move back within the wedge. In some ways, it is odd because there is a bullish divergence that has formed based on the higher lows in the RSI. So if the Dollar index doesn’t bounce back relatively quickly, it seems that the breakout could have been false.

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