Tech Wreck 2.0 smashes Australian dollar

Tech Wreck 2.0 is here. With it has come a rising US dollar (or is it the other way around?) Tumbling commodities and emerging markets. And a free-falling Australian dollar. First, the charts.

DXY has a strong double-bottom and is off and running:

DXY US dollar index running higher

The Australian dollar was hammered against the US but held against other falling DM currencies:

AUD smashed versus DXY but other DMs falling too

The AUD is still stronger than emerging market forex:

AUD versus emerging market currencies

Brent and gold are still deadly enemies:

Brent versus gold

Base metals were slaughtered as the supercycle meme implodes with a higher DXY:

Base metals tumble

Big miners were hit

BHP, RIO, AAL, GLEN

Overheated emerging markets stocks have jumped off a cliff:

Emerging market stocks free-falling

Junk is showing a little stress:

High yield bond markets

Treasury yields keep on keeping on:

Bond yields higher

Nasdaq capitulated with a broken neckline of a near-perfect head-and-shoulders top. Look out below:

Nasdaq crash

It’s all over for growth stocks. The march of US yields is like cryptonite not crypto:

Tech Wreck 2.0

There’s more room for yields to rise and keep smashing tech:

More bond selling ahead 

Driven by inflation:

US inflation surge

The Fed has abandoned you. Via Westpac:

Fed Chair Powell’s comments at a WSJ jobs summit disappointed markets when he did not signal that the Fed would alter its stance due to surging bond yields. He reiterated that it is still “a long way” from reaching the policy goals, and that there is “a lot of ground we have to cover”, signalling it will keep policy very accommodative for a long time. On the rise in bond yields, he said there were a number of reasons, including an increase in confidence, but added that the speed was “notable and caught my attention,” and that he is concerned about “disorderly” moves and any “persistent tightening in financial conditions”. Questioned on inflation and whether the expected rise will be transitory or sustained, Powell said prices should be moving higher from the sub 2% pace, in part due to increased spending as the economy opens, but that it has been a “low inflation world” for some time and that is unlikely to change. If the transitory increase does occur, Powell said the Fed would likely be “patient.”

Be careful what you wish for, Mr Powell. Plenty more downside for tech and the AUD to change his mind.