See the latest Australian dollar analysis here:
The Australian dollar was weak overnight despite a powerful relief rally for anything and everything that has been recently squashed by rising US yields and greenback. DXY eased as EUR rose:
The Australian dollar could not catch a bid and still sits right on the neckline of its head-and-shoulders topping pattern:
Gold did better and has a possible double bottom in place. The oil chart does not look well:
Base metals enjoyed a weaker DXY:
Big miners were more mixed:
EM stocks still look dangerously poised but did lift:
Junk is absolutely fine leaving the Fed on the sidelines:
US yields climbed:
Stocks reversed recent trends with a powerful relief rally in growth. The wider market still looks strong:
DXY took a breather but it is only that, in my view. Ahead is a booming US jobs market. If not tomorrow then over the next six months:
As American GDP booms back at a pace unseen in twenty years:
Leaving the world eating its dust:
This is leading markets to fight the Fed:
Thanks to the tailing Biden fiscal gale. Though it’s was more moderate than I had hoped:
- $2.2tr over ten years but mostly over eight.
- Roughly halved between hard and human infrastructure.
It is almost all new spending and will add 1%+ to GDP per annum for the life of the Democratic White House assuming it wins a second term.
US growth exceptionalism is assured as Europe does too little fiscal, China returns to restructuring and EMs get crushed between them.
No change for me. AUD, EMs, commodities and growth stocks to keep taking the heat.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
- Australian Academy of Science: Nation faces climate doom - April 1, 2021
- Daily iron ore price update (Big Clive) - April 1, 2021
- Morrison Government vaccine rollout tracking Albania - April 1, 2021
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Sometimes correlation is not causation. Take this
Are their yields raises Mr Chekov?
Yes, Captain. Broadly. Over the entire sheep.
Then FIRE Mr Sulu. Open FIRE with everything we’ve got. We’ll make these lily livered cowards pay for their ungratefulness!
If Biden is able to drive his spending into productive investment the US will be off like a rocket.
Particularly as the operation to jab the population is picking up speed and a good chunk of the population have been infected already.
More than a few in the US are likely to understand that you don’t get to keep leading the world by allocating capital to Wall Street scams.
The US needs to get back to doing what it does so well.
Do the right thing after exploring every possible alternative.
It is all producitve. Very well thought out.
Totally agree. The changes to taxes looks very sensible as well, though possibly not through the prism of S&P500.
Exactly. I don’t know much, but I do know personal and company (local and domestic profits) tax cuts = market up, and the corollary holds just as true.
Maybe, but lots of genuine productive spending also = market up, so there are opposing stock forces in action.
Trading Lifes great. Just dont read the news.
Eurodollar futures not seeing any runaway inflation……just another reflation story…………Infrastructure package really just needed repairs over such a time period after a prolonged period of neglect
https://alhambrapartners.com/2021/03/30/how-does-reflation-look-from-the-point-of-view-of-the-one-market-that-gets-it/
This will be like Trump’s stimulus back in 2017/18.
A lot of excitement, predictions about growth, rising inflation and bond yields.
We got that for 6 months and then it all fizzled out.
Noticeably, bond yields peaked and fell.
I can’t remember the exact Trump stimulus figures, but Biden is just doing the same thing.
Obviously, we will get the same result.
Unless the fed increases its monetary easing relative to the other major nations, the USD should strengthen.
Not because of all the debt driven stimulus, but simply because the US economy is in a much better position than its competitors.