See the latest Australian dollar analysis here:
DXY was up Friday night and looks close to break out. EUR and CNY fell:
The Australian dollar lifted anyway on the risk rebound:
It was stronger than EMs too:
CFTC positioning became is now extended bearish at -61k contracts:
Oil was stable:
EM stocks firmed:
US data was again solid. Housing starts were up year on year:
Privately‐owned housing starts in July were at a seasonally adjusted annual rate of 1,191,000. This is 4.0 percent below the revised June estimate of 1,241,000, but is 0.6 percent above the July 2018 rate of 1,184,000. Single‐family housing starts in July were at a rate of 876,000; this is 1.3 percent above the revised June figure of 865,000. The July rate for units in buildings with five units or more was 303,000.
Privately‐owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,336,000. This is 8.4 percent above the revised June rate of 1,232,000 and is 1.5 percent above the July 2018 rate of 1,316,000. Single‐family authorizations in July were at a rate of 838,000; this is 1.8 percent above the revised June figure of 823,000. Authorizations of units in buildings with five units or more were at a rate of 453,000 in July.
The big fall in the long bond is lifting housing (charts from WSJ Daily Shot):
While wages still strong with few layoffs:
Which, along with good productivity:
Is lifting wages:
Which, in turn, is aiding industry:
And GDP gains:
From Merrill Lynch:
The data boosted our 3Q GDP tracking estimate by 0.4pp to 2.1% qoq saar. 2Q was unchanged at 1.8%.
And Goldman Sachs:
We left our Q3 GDP tracking estimate unchanged on a rounded basis at +2.1% (qoq ar).
The US is holding up while China and Europe sink. This can only push DXY to break out as it delays Fed easing.
Driving the Australian dollar lower.