The recent DXY super spike came off again Friday night as markets bid the univestable EUR. This is all positioning and nonsense.
AUD went on a rampage. The new high against JPY also matters. The North Asian FX war is heating up fast and damage markets as it worsens:
Oil is buggered in my view:
So are metals but, hey, it will take time for Goldman’s patsies to flushed out:
Miners went nuts:
EM stocks are on a double bottom. Good luck with that:
Junk is still weak:
As the US curve super-inverts:
Stocks are busy preening in the mirror again:
Precisely nothing has changed in the past week. Markets bounced on stretched positioning again. But underneath the macro is still getting worse:
- EUR is an absolute mess as ECB super-tightens into a trade shock, energy shock, war shock and developing deep recession.
- CNY has nowhere to go but down. PBoC effors to slow it are desperation. Yield spreads are very negative. Domestic demand is in the toilet. A trade shock has started. A liquidity trap has snapped shut and PBoC has more cuts ahead.
- JPY is racing it to the bottom.
- DXY is still TINA as the Fed tightens much more yet.
This leaves the AUD on a hiding to nothing, especially after last week’s RBA proto-pivot which now has yield spreads versus the US reversing violently:
If you think that this is a bullish AUD environment then I have a bridge that I will sell you.
