As said repeatedly this year, there are no better circumstances for a commodities, AUD and miner crash than a tightening Fed and DXY bull market plus loosening China and CNY bear market.
And now it is beginning to show. The AUD, commodities and miners all gapped lower at the open this morning. If it breaks the 0.73 cents low there is little chart support down to 70 cents:
Meanwhile, gold, oil and copper were all flogged at the open:
I like to think of this period in the commodity crash as the “coconuts phase” when markets pretend that miners farm coconuts and ignore the crashing underlying price of their only product. In due course, this will, as usual, break in a panic. For now, we are down only modestly:
A question. What do you do when the foreign earnings of the most indebted households on earth crater? Why! Buy the world’s most expensive banks!
Even though when commodities crash, so does the yield curve, hurting bank earnings:
Such is a world without yield.
