Australian dollar capped by European recession

Tuesday 24 October 2023

It was a pretty simple story overnight as the flash PMIs rolled in and the US firmed:

While European sank:

HCOB Flash Eurozone Composite PMI Output Index (1) at 46.5 (September: 47.2). 35-month low.
HCOB Flash Eurozone Services PMI Business Activity Index(2) at 47.8 (September: 48.7). 32-month low.

That was enough to reverse recent EUR strength and DXY weakness.

That both capped any lift in the AUD from Chinese stimulus and lifted sentiment as long yields eased.

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.