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Zurich 22 October: The US appears to be one of the few economies which analysts are not rating positively for growth prospects. The focus on the Fed´s intervention, election jitters and continuing negative figures on unemployment and productivity were the main factors. Gold is still in bubble territory according to analysts. Although slightly lower than the yearly trend, the support for the metal´s high sentiment is still on fear and a flight to safety. For currencies, analysts appear to believe that the dollar cannot get any lower and the focus has shifted to what the Fed´s intervention will do. Finally, legendary bond fund manager Bill Gross was active on the idea of bonds being in a bubble, although with sentiment low on bonds there appears to be little consensus for the idea.

The US was one of the few economies perceived as negative in October. In analysts´ perspective on the economic situation across the globe, the US is the clear dominant discussion, fuelled by both speculation on Fed interventions, and the rush of economic analysis in the financial press around the midterms. However, under the US agenda the other most visible economies have shown a clear rise in sentiment. This situation raises the question of whether there is enough volume in the “good news” countries for perception to shake off the wave of “bad US news.” Media Tenor Research Director, Matthias Vollbracht explains, “If there is a high enough volume of negativity coming out of the US, then that will be far more important for driving sentiment than the positive perceptions that cannot get awareness.”

The slight cooling on Gold sentiment in October compared to the yearly sentiment would suggest that analysts have eased off on their opinoin of Gold´s safety factor. However, as the overall sentiment is still above 10%, there is enough comment on continually rising prices to conclude that sentiment will play a role in supporting the price for some time yet. The continuing lack of a fundamental for the high price still shows a characteristic bubble tendency however. Media Tenor´s research shows that agricutlural products, and food in particular, has not picked up in its share of the agenda, but corn, orange juice, cotton and sugar are all showing support for price increases among the cited analysts.

In the wake of the rather spectacular currency war headlines, analysts have seemed to found a unanimous opinion that the dollar simply has nowhere left to go, and therefore the Dollar sentiment has stabilized. Matthias Vollbracht highlights the fact that the general economic conditions and the dollar debate have become mixed to the point where one might be forgiven for believing it was the same issue. “To some extent the dollar´s plunge became a substitute for other perceived weaknesses in the US economy and for the growth of China´s economic power. The US government´s position towards China may have helped fuel the second position, but the general weeakness is symptomatic of the lack of a perceived recovery after the crisis.”

The bond bubble discussion was raised early in November´s coverage. The often quoted Pimco fund manager Bill Gross was present in a discussion around the possibility that bond prices were overvalued and due for collapse. However, any sort of spectacular bond action would contradict a rather stable sentiment trend for bond markets in general. This shows a change in the bond debate, away from inflation and debt fears, to a more specific focus on bonds themselves and their value as investment objects. For other categories, the equities revival continued to develop positively. Increased discussion on currencies in the face of pending Fed actions was the other developing story in October.

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