DXY is fading again:
AUD firmed gain:
JPY shorts are getting squeezed:
The oil headfake is over:
Taking down metals:
Miners eked out gins with stocks:
EM is poised for breakout:
Junk is stabilising:
Yields rolled”:
Giving life to stocks:
A sequence of events has taken the wind out of the “no landing” panic sails in the lat two days.
US JOLTS were weak, easing pressure on wages:
Shocking earnings for Starbucks and weak earnings for McDonald’s boosted fear for struggling consumers.
The ISM was well below expectations:
“The Manufacturing PMI® registered 49.2 percent in April, down 1.1 percentage points from the 50.3 percent recorded in March. The overall economy continued in expansion for the 48th month after one month of contraction in April 2020. (A Manufacturing PMI® above 42.5 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index moved back into contraction territory after one month of expansion, registering 49.1 percent, 2.3 percentage points lower than the 51.4 percent recorded in March. The April reading of the Production Index (51.3 percent) is 3.3 percentage points lower than March’s figure of 54.6 percent. The Prices Index registered 60.9 percent, up 5.1 percentage points compared to the reading of 55.8 percent in March. The Backlog of Orders Index registered 45.4 percent, down 0.9 percentage point compared to the 46.3 percent recorded in March. The Employment Index registered 48.6 percent, up 1.2 percentage points from March’s figure of 47.4 percent.
Fed Chair Jay Powell hosed off both rate cuts and hikes.
Oil has puked as Rafah gets underway, and global demand remains lacklustre.
In Australia, the consumer is stone dead, retail is galloping backward, and the trade surplus collapsing.
If we get another hot US jobs report tonight, the ‘no landing’ thesis might be back on, but the last few days have been all about soft landings and stagflations.
This has taken the pressure off DXY and JPY, allowing AUD to float higher.
