Dear investors, friends and clients,
We would like to inform you that the Incrementum Inflation Signal has increased its disinflationary stance to its maximum level as of last Friday!
It has been signaling falling inflation momentum since shortly after the election of President Trump as of End of November 2016. The initial change of the signal last autumn seemed somewhat counterintuitive back then, as market participants were busy talking about “Trumpflation” and the “reflation trade”. By now it should be more evident, that inflationary pressures are not following through as commodity prices are faltering once more.
However, the Fed seems to be eager to stay on their quarterly rate hike path. We have warned, that in the current US-Dollar centric global monetary order too much deflationary pressures could lead to severe economic havoc in many different regions, especially emerging markets. To us especially China (i.e CNY/USD) looks vulnerable at the moment. Watch out for further depreciation with the potential of repercussions, as financial markets generally seem to be quite complacent right now. According to our investment process we are currently not invested in long positions in inflation sensitive assets like commodities including precious metals and mining stocks. However, the gold price does have the potential to turn first, if a risk off move finally materializes.
Mark J. Valek & Ronald-Peter Stoeferle Partner & Fund Manager Incrementum AG Im alten Riet 102 FL-9494 Schaan
Veröffentlicht am 10. Mai 2017