DXY and EUR did a two-step last but the former wants to break out still:
AUD fell against DMs:
And EMs:
CNY is free falling:
Gold was weak:
Oil weaker as OPEC appears likely to add 1mb/d:
Base metals fell:
And big miners:
EM stocks were caned to new lows:
Despite a bid for EM junk:
Treasuries were bought:
Bunds boomed:
As Italian debt busted:
Stocks took a hit:
Political issues on both sides of the Atlantic drive the price action. Italy is playing Europe for a chump, via Bloomie:
Two euroskeptic lawmakers from the government coalition partner League were named to head key economic committees in Italy’s parliament, while the party’s chief threatened more trouble for the European Union.
Economist Alberto Bagnai, author of two books advocating the dismantling of the European monetary union, was selected on Thursday as head of the Italian Senate finance committee. Claudio Borghi, a top economic adviser for the League, was named the head of the budget committee in the lower house.
…the appointments are likely to add weight to the new government’s pledge to challenge the European Union in key areas. However, the new finance minister, Giovanni Tria, has pledged that the country remains committed to the euro single currency.
If you believe that then I have a bridge I can sell you. Italy will say it is committed to the EUR while enacting policies that make it impossible for it to do so. This will help contain a little of the bond war and, when push comes to shove, the Italian Government will be able to blame Europe for its exit for domestic consumption. I continue to believe that the Fascist/MS5 alliance is an existential threat to the EUR.
Over the pond, data was a little weaker with a lower than expected (but still strong) Philly Fed, and tech stocks got buffeted by a Supreme Court ruling on state taxes. The Fed chair, Jerome Powell, also spooked when declared:
Changes in trade policy could cause us to have to question the outlook,” Powell said Wednesday at conference in Portugal. “For the first time, we’re hearing about decisions to postpone investment, postpone hiring.”
Mostly it’s noise but it did push the USD away from its breakout highs. Though the bid returned later.
No change for me, then. USD higher, EM and commodities plus AUD lower ahead.
