See the latest Australian dollar analysis here:
DXY was firm Friday night:
The AUD was universally weak against DM:
Speculative positioning remains modestly bullish at 12k contracts:
Gold was soft:
As the US rig count rose only three to 978:
• Total US oil rigs took an anticipated breather this week, +1 to 799
• Horizontal oil rigs were up, +1 to 697
• The oil price continues to recover
• If rig count additions continue on our forecast trajectory, expect this to weigh on sentiment during March, particularly if supply gains surprise to the upside
Base metals fell:
Big miners lifted:
EM stocks bounced despite DXY:
So did junk:
The key was a strong bid for Treasuries across the curve:
Stocks took off to new post-correction highs:
There was not a lot to explain the bid in Treasuries that fired off the risk rally. China bailed out Anbang. European inflation was weak on target. Fed speakers were mixed.
What was of note was the AUD weakness in the face of roaring risk on. It appears the rapidly deepening yield spreads are starting to impact the currency. All spreads hit new wides before pulling back a little. The 5 year breached -30bps, it’s deepest in eighteen years before retracing:
But remember how dislocated the currency is from the carry at the moment:
Higher stocks and a lower AUD puts the MB Fund in clover.
David Llewellyn-Smith is chief strategist at the MB Fund which is currently overweight international equities that will benefit from a weaker AUD so he definitely talking his book. Fund performance is below:
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The information on this blog contains general information and does not take into account your personal objectives, financial situation or needs. Past performance is not an indication of future performance.