See the latest Australian dollar analysis here:
DXY is up and away again:
AUD was pulverised back down:
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As commods gave way under mounting recession pressure. Oil:
Metals too. Copper is below key support:
Miners have enormous double tops in place:
Everything else held on. EM stocks:
Yields lifted a little:
Watch oil. The Fed has to get it down a lot more before it can pivot into what is clearly now a building recessionary environment.
Anything below $80 Brent probably puts a pivot in the game though I think it would be better off below $60. It will take more time yet to work through Ukraine supply-side frictions so the moment the Fed turns it’s going to run again.
Of course, if we get a credit event first then market reflexivity will take over and we may end up with oil below $50.
Gas and coal are still going up after the recent US LNG plant explosion and Russia starting to squeeze Nord Stream 1. They can only be brought to heal by crashing demand so there’s more work for the Fed there too.
The bearish price action is not done yet. But oil on Friday is indicative that the fat lady is warming her chords.
Given the AUD is a commodity currency and the last leg of this bear market leading into a global recession by definition must deflate commodities, I still see it going lower.