Australian dollar sags with US inflation

David Llewellyn-Smith

Sunday 2 April 2023

Nothing could give a clearer signal of diverging market views on the outlook. DXY rose:

AUD sagged:

Gold eased. oil is at resistance:

Dirt is all over the pplace:

Miners gained:

EM too:

Junk popped:

Yields fell:

Stocks want to break out:

The fuel was PCE which came in softer than expected:

Core PCE at 0.3% is a considerable improvement from where we started but wages are still strong so the Fed cannot relent yet.

Moreover, if stocks keep running, expect consumption to lift and pressure on prices to build again.

Unless or until the regional bank credit crunch bites.

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.