The Australian dollar is down sharply this morning after last night’s leap:
Bonds are bid except way out past the RBA’s QE horizon:
XJO is off sharply:
Big Iron is mixed:
Big Gas bashed:
Big Gold still can’t break the corrective trend:
Big Banks have reversed the recent gains:
US futures are weak. Also, for the past few months, as RBA QE has gained momentum and the AUD has fallen, the ASX has turned negatively-correlated to the currency after running together through the post-COVID rebound:
Markets may have reached the conclusion that the Aussie economy, and profits, can’t take a higher currency without material damage.
If so, they’d be right. Australia already has the weakest profits recovery on deck anywhere:
And that number is boosted by New Zealand.
