Australian dollar launches on US jobs miss

DXY plunged Friday night and EUR jumped:

AUD popped though fell against JPY which roared higher:

The Crap Complex enjoyed the DXY reprieve:

The Treasury curve steepened sharply:

Stocks were stable:

I am not sure what all the fuss is about. US jobs missed marginally but the details were strong. There is nothing here but encouragement for more Fed hikes. Goldman:

Nonfarm payrolls rose 209k in June, 21k below consensus and the first miss in fifteen months. Revisions were negative as well, and the three-month average pace now stands at +244k, down from +283k as previously reported. The household survey was somewhat stronger, with the unemployment rate retracing one tenth of the May increase to 3.6%, driven by a 273k gain in household employment. However, the underemployment rate surprisingly rose two tenths to 6.9%. Average hourly earnings surprised to the upside at 4.4% year-on-year (vs.4.2% expected). Our Q2 wage tracker stands at +4.9% on a year-over-year basis (vs.+5.0% in Q1) and +5.1% on a quarterly annualized basis (vs. +5.0% in Q1). We continue to expect the FOMC to hike by 25bp in July before going on hold in September.

Wage growth is too strong for a Fed focused on sticky core inflation. Year-on-year inflation comparisons are about to bottom out and rise too.

There’ll need to be a big turn in the data to stop the Fed from hiking right through H2. It needs a recession to kill labour demand.

Conversely, Australia does not have this challenge given the mass immigration labour supply shock and the RBA does not need to follow the Fed.

AUD in this environment is a ‘sell the rip’.