Australian dollar, markets ignore China’s viral spiral

See the latest Australian dollar analysis here:

Macro Afternoon

The Australian dollar shurgged off the news of the suddenly much worse COVID-19:

Bonds whimpered:

XJO came off a little and has a terrific set up for a mighty double-top but it looks more likely to just keep going. S&P futures are down modestly:

Iron ore is, amazingly, up again. There must be some restocking going because this makes no sense in context:

Big Iron registered the viral surge with a blip:

Big Gas is up with oil. I can’t see any rebound in travel in the near future:

Big Gold continues to disappoint:

The Ponzi is great place to hide:

There is some reason for the optimism. New cases in Hubei outside of reclassification fell again. But rest of China jumped and that is more of a concern.

Some of  it can also be explained by a euphoric Phil Lowe:

  • outlook for the Australian economy is improving
  • coronavirus is having an uncertain impact, but absent the virus Oz outlook improving
  • virus having a major impact on education, tourism sectors
  • Chinese policy stimulus will be a positive for Australia
  • low interest rates are working, going to take time
  • says he is not obsessed with getting inflation back to target in a hurry

Perhaps he should be obsessed with the clear damage being wrought upon the economy before his very eyes.

David Llewellyn-Smith


  1. There will come a point when investors will realise ‘oh shit maybe this virus is serious’ lets pullout of the market.

  2. iron ore is in for a hiding when the Corona ramifications become more widely appreciated… it’ll filter through eventually