See the latest Australian dollar analysis here:
DXY eased last night as EUR firmed:
The Australian dollar was put to the sword versus DMs:
Metals were crushed:
But miners did better as iron ore bounced on Pavlovian stimulus hopes:
EM stocks were soft:
Junk was fine:
Stocks were soft:
There was not much in news. Hong Kong is still on the brink. The trade non-deal is quiet which is negative given expectations. The FT was negative:
The US and China are struggling to complete a “phase one” deal to halt their trade war, with senior officials in Washington and Beijing still jostling over intellectual property provisions, agricultural purchases and tariff rollbacks after weeks of negotiations. According to people close to the talks, Trump administration officials are frustrated that China has not offered enough concessions to justify a reduction in US tariffs on Chinese goods — a longstanding demand from Beijing that has become further entrenched in recent weeks. One person with knowledge of the discussions said that China was “absolutely” delaying the truce with its approach, jeopardising the chances that a final agreement could be reached in the coming days, the original target set by both sides.
This won’t help, via Bloomie:
China’s President Xi Jinping said “continuing radical violent crimes” in Hong Kong have “seriously trampled on the rule of law” and that “stopping the violence and restoring order” is the city’s “most urgent task” at present.
Separately, the U.S. Senate moved to expedite passage of legislation that would support pro-Democracy protestors in Hong Kong by putting the city’s special trading status under U.S. law under annual review.
Meanwhile, pathetic Australia endorsed a free trade deal.
In data, the US housing market reamins the global bright spot. Delinquencies are now plunging to new lows:
As mortgages power on:
Right along with a refi boomlet:
And more construction:
Add to that big deficits:
Whereas Europe is still being tightfisted:
Though China has the right idea:
There’s no change to the AUD outlook. There’s no European recovery of any substance in sight as China struggles on, and US growth is primed to outperform with lower than ususal pass through to global supply chains owing to tarrifs.
Add the Hong Kong end game, plus a diminished market short position, and the Australian dollar looks likely to keep on falling.