DXY firmed overnight:
AUD paused:
No help from North Asia:
Gold is either going to double top or take off. Oil is cooked for now:
Dirt stumbled:
Big miners are range trading:
EM is off and running:
Supported by junk:
Yields paused:
And stocks:
Charlie McElligott at Nomura sums it up nicely:
MARKET REMAINS “BUYERS OF ASSETS” ON GROWTH DATA MODERATION, AS THE APRIL “NO LANDING” –TAIL IS BEING DESTROYED AFTER INFLATION AND RETAIL SALES DATA.
We’ve spoken about clear signs of US growth data cooling in recent weeks, which critically has come in stark contrast to the Mar / Apr “No Landing” term-premium rebuild which roiled Assets, from USTs to Equities.
Well that prior concern is now long-gone after the double-whammy of “benign for Assets” data (Core Inflation data again moving closer towards normalizing and justifying “easy” Fed shift, while the Consumer is adjusting down their own activity in the form of Retail Sales downside surprise), now piling-onto the already “cooling” -vibe of the past two weeks.
I doubt the US exceptionalism theme is over. Indeed, I see it as the defining theme of the forthcoming business cycle. But the “no landing” is certainly done.
It is now a question of how soft the landing is. I expect it to get harder before it gets softer again so upwards pressure on AUD remains the base case for now.
Beyond that is the US election battle over China tariffs. It is hard to see AUD prospering as that comes into market consciousness.
