Australian dollar sags as GDP shocker sinks in

See the latest Australian dollar analysis here:

Macro Afternoon

The always bid in Asian time Australian dollar is sagging this afternoon as the unfolding GDP shocker sinks in:

Bond yields are back at the lows but won’t break lower despite not fully pricing what’s ahead:

XJO is up a little but does not look well with those little lower lows:

Dalian is down:

It’s amusing watching Big Iron learn nothing from 2015:

Big Gas is mixed:

Big Gold is BTFD:

The Big Bank bear is back and growling:

Big Realty exists in a Scummo safe zone:

There’s a good chance that the AUD will be more heavily beaten up as London comes in later this afternoon. It often has a much better grasp of macro drivers than Asian markets do.

David Llewellyn-Smith
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  1. Are Aussie gold miners still a viable option? I can’t make a call one way or another; too much else going on. Opinions please!

    • I’m quite long and contemplating taking some profits — gold and the miners have got to take a breather soon. It’s all very overbought. But my aim is to buy back in (hopefully) at much lower levels. The gold trade has at least a couple of years to run so, as long as you’re playing in cash, dip your toe in and then average in over time. I admit that playing the Aussie miners is a bit tricky because of the currency in the background, but if you buy a profitable miner then as the gold price rises it’s all gravy.

      Northern Star just made a take-over bid for Echo Resources at a huge premium and their stock rose is response to the news. Normally with a premium that big the acquiring company’s stock would take a backward step. This is just getting going.

      (As an aside: avoid bonds at current levels – the risks are becoming very asymmetrically skewed)

    • My opinion: probably will rise from here but I’m not buying. I don’t like buying at record highs, I don’t know if the upside is very large but the downside could be large.

      But I am already long USD so don’t really need another effectively “short AUD” position, which is what long Aussie gold is. But that’s me. Plenty of people will have a different risk tolerance (and will get richer than me! Or poorer!)

    • I keep thinking about buying in, then either get in and out quickly for some quick coin, or just stay out….seems really overbought for me.

      I find myself wanting to get in and go long, buy usually just end up buying USD instead.

      Bonds are probably overbought, too, but I personally think they have some steam left in them at the longer end, as deflationary forces keep rearing their heads.

      I know others are taking about inflation, but I think that will follow deflation; hence, it will be difficult to get interest rates and bond yields going up.

      My 2c

      • BurbWatcher, I thought you were on the MNRS’s.
        Have you sold them already?
        Maybe it was another member.