Australian dollar smashes 2023 low

DXY continues its very bearish pattern and EUR the reverse:

AUD smashed a new 2023 low but managed to climb back above support. It flew vs JPY after the BOJ stayed dovish:

Commodities all rallied:

Miners a bit:

Ditto EM and junk:

As yields were bid:

Stocks are the mirror image of DXY, very bullish charts:

The market is all on one side of the ship. The EUR long is extreme:

Driven by robots:

As usual for markets, a Pollyanna view of the end-of-cycle is now priced. The EUR long assumes:

• a US soft landing;
• and even softer European landing ;
• China to drive global growth, and
• nothing to get in the way of any of it.

The problem is:

• the Fed is still snookered by too-high inflation even as growth ebbs away and a credit crunch simmers;
• ditto the ECB;
• China is adding no new net demand to the global economy, and
• we are on the verge of a debt-ceiling accident.

At some point in the not-too-distant future the market positioning imbalance is going to unwind.

I remain of the view that the brief new low in AUD Friday night is a signal not noise.