Australian dollar hangs on grimly as end of cycle shock arrives

DXY hung on last night:

AUD did too:

Commodities firmed into stupidity:

Miners did not:

EM stocks don’t know what to do:

Junk spreads are telling them to sell:

The Treasury curve steepened markedly. Recession!

The village idiot has bid itself right to the precipice:

I am bearish. Look at this chart of the KBW banking index (which is a mix of large and regionals) versus the S&P500:

Does anyone seriously believe that US banks can crash 40% and not hit the economy and broader earnings?

Here is the longer timeframe chart:

The KBW has never fallen this far without doing serious harm to the broader market. The closest similar period was the Dot Bomb but, even then, the indexes ultimately reconnected and fell much further together.

The end-of-cycle event is here and, as usual, the stock market is the last to know.

Risk is going to get smashed and the AUD with it.