DXY was up again last night:
The Australian dollar was strong anyway:
Gold was whacked, oil less so:
Metals were mixed:
Miners hit:
EM stocks too:
Junk eased:
Treasuries were sold:
Along with stocks:
Westpac has the wrap:
Event Wrap
Senate Majority Leader McConnell said Democrats “poured cold water” on his offer to set aside some issues in a fiscal relief bill and rebuffed Treasury Secretary Mnuchin’s $900bn proposal. Democratic and Republican lawmakers working on a relief plan delivered a more detailed summary of their proposal on Wednesday.
US JOLTS job openings in October increased to 6,652k (vs est 6300, prior 6494k). The quit rate was 2.2%, unchanged from September (revised from 2.1%).
Event Outlook
Australia: Melbourne Institute inflation expectations have picked up from recent lows ahead of the December update. The RBA Bulletin will showcase the Bank’s latest research.
New Zealand: Westpac expects a modest 0.3% pull back in November retail card spending. That reflects that much of the rise in spending last month was related to durables spending, which can be lumpy on a month to month basis. A result in line with our forecast would still leave spending at firm levels.
China: M2 money supply growth is expected to print at 10.5%yr in November, and new loans will reflect the robust recovery of the credit market (market f/c: CNY1450bn). The November update of foreign investment, which has been running well above pre-COVID levels, will also be published.
Euro Area: the ECB will announce its December monetary policy decision. The focus will be on the PEPP and the TLTRO, which have been flagged as the choice instruments of the policy recalibration. The Bank will also provide its latest economic forecasts, including the first estimates of 2023.
US: The November CPI is set to print precariously close to the deflation threshold, and will remain an ongoing concern for the Fed (market f/c: 0.1%). Following this, we will receive a clearer signal of initial jobless claims in the wake of the Thanksgiving holiday (market f/c: 725k). The monthly budget statement should narrow, but will remain elevated (market f/c: -$200bn).
It’s simply a reversal of the recent pattern with markets getting a little spooked by virus numbers and buying DXY with all that flows from that.
There’s no reason to get overly complicated with the dynamics for the AUD. Sometimes you’ve just got to point out the obvious. Iron ore is off the hook:
And futures are still ripping higher.
The iron-clad Australian dollar is ploughing through rising market swells.
