The same worries are resurfacing: concerns about lower growth in the U.S. and China, uncertainty about sovereign debt issues in the euro zone, and higher margin requirement in some commodities.
China's inflation eased somewhat in April and its industrial output growth slowed down more than expected last month. Greece's debt crisis and rising inflation risks in Poland and England have increased concerns about euro zone economies, causing a sharp sell-off in the euro and spike in the dollar. And late this afternoon, the CME Group announced it will raise margin requirements on gasoline contracts, following steep increases in silver margin rates over the past few weeks. It's like deja vu — a repeat of last week's rout. Traders forced to meet margin calls has caused some of the selling in commodities over the past two weeks. But there also has been a change in sentiment. From global perspective, the short dollar, long euro, long commodities trade is starting to unwind on concerns about a slowdown in global growth, rising inflation and interest rate hikes. And, remember, in most similar occasions of cycle pressure begun with certain classes of commodities, excluding coal this time, it is not commodities stocks which may get a start and prolonged attack of volatility, but it is the financial sector, the banks. Least but not last, what you may ask now, "Baby, hit me one more time?"...precisely, like she pondered 13 years ago. http://www.youtube.com/watch?v=i1BoWxjcbkc&feature=related '+'
