Bloodied Australian dollar limps higher

David Llewellyn-Smith

Monday 27 February 2023

DXY retraced some last night as markets wonder if enough new tightening has been done:

Oil is stuck in a nasty rising wedge:

Base metals relief rallied:

Miners barely raised an eyebrow:

EM stocks stopped falling at least:

Junk did better:

As yields eased:

And stocks firmed:

US durable goods came in soft and the Dallas Fed contracted.

At issue for the market is whether or not the US January data pop is real or seasonal, both in the form of warm weather and BEA numberwang. Both GDPNow and InflationNow have turned very strong:

I can’t see further big moves in forex either way before we find out what is real and what is imagined.

About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal. 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.