The USD juggernaut is crushing everything. EUR hit its lowest since 2003, JPY is collapsing, CNY not far behind:
Commodity currencies were thumped other than Russia:
Gold is in free fall. In this mood, it could hit new post-GFC lows:
Brent is fading:
Base metals too:
Big miners were hit:
EM stocks thrashed:
US high yield debt is OK, EM got hosed:
US yields are reaching for the sky:
European spreads were stable:
Stocks tacked on a few points:
The DXY may replicate its swift 2014/15 move and head quickly for $1.10. Emerging markets (and commodities) are now squarely in the way. For now, the fallout is contained but is hitting most obviously to China where yields have spiked:
Others are being held together by oil. However, as capital keeps flowing out of China we’ll see last year’s deflationary combination for commodity prices return:
- slowing demand;
- monetary headwind from rising DXY, and
- falling commodity currencies deflating costs.
2017 may well be the year of the Australian dollar crash.
