Australian dollar thumped to new lows with metals

DXY was up last night. EUR and CNY down:

AUD was hit against DMs to new lows:

EMs were just as bad:

Gold fell:

Oil too:

Base metals were smashed:

Big miners puked:

EM stocks too:

EM junk cracked. A crack opened in US junk as well:

Treasuries were dumped:

And bunds:

Stocks eased:

The culprit was a tearaway US ISM:

The August PMI® registered 61.3 percent, an increase of 3.2 percentage points from the July reading of 58.1 percent. The New Orders Index registered 65.1 percent, an increase of 4.9 percentage points from the July reading of 60.2 percent. The Production Index registered 63.3 percent, a 4.8-percentage point increase compared to the July reading of 58.5 percent. The Employment Index registered 58.5 percent, an increase of 2 percentage points from the July reading of 56.5 percent. The Supplier Deliveries Index registered 64.5 percent, a 2.4-percentage point increase from the July reading of 62.1 percent. The Inventories Index registered 55.4 percent, an increase of 2.1 percentage points from the July reading of 53.3 percent. The Prices Index registered 72.1 percent in August, a 1.1-percentage point decrease from the July reading of 73.2 percent, indicating higher raw materials prices for the 30th consecutive month…Respondents are again overwhelmingly concerned about tariff-related activity, including how reciprocal tariffs will impact company revenue and current manufacturing locations.

That was enough to trigger the usual US decoupling chain reaction through a stronger DXY, weaker EMs and commodities which always takes down the AUD.

Add a slowing China and there is no immediate end in site to it. AUD at 0.7 cents looks good for this year. 0.65 cents next year.