Australian dollar to crumble with jobs


DXY is up again:

AUD is taking a breather:

It is very unusual to see a bullish trend in AUD versus North Asian weakness. Thanks Albofaltion:


Oil is puking again:

Commods too:

EM is still bullish:


Junk is painful:

Yields firmed a little:

Stocks only go up:


Jay Powell seems to have finally learned the lesson that over-promising rate cuts leads to no cuts at all:

Federal Reserve Chair Jerome Powell said officials are increasingly wary of potential risks to the labor market from high borrowing costs as they seek more evidence inflation is slowing down.

Speaking to lawmakers Tuesday, Powell was careful not to offer a timeline for interest-rate cuts, which investors are now betting will begin in September. But he emphasized mounting signs of a cooling job market after government data published July 5 showed a third straight month of rising unemployment.

“Elevated inflation is not the only risk we face,” Powell said in prepared remarks before the Senate Banking Committee.

However, he promised nothing for July and reaffirmed his data-dependent outlook.

Hence the market gave him a muted response.


You can expect the same shift in rhetoric from the RBA over the next few months.

The jobs market is breaking down and will soon preoccupy the local central bank as much as inflation does:

The Australian dollar will lose its yield uplift before very long.

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.