Australian dollar pounded by US price shock

DXY is up again.

AUD down.

CNY fine.

Gold whacked.

Metals OK.

Miners are going lower.

EM rolled.

Junk is fine.

Yields up a bit.

Stocks flat.

The US PPI was pretty hot today.

Even worse, it’s mostly services. Add ongoing pressure from goods via tariffs.

With wage growth going strong as Trump slashes immigration to zero, US inflation is moving away from the Fed’s target.

The market still thinks Trump is going to win the interest rate fight, but I’m not cutting if I’m the Fed.

The stock market (and AUD) may need to give the Fed an accident to cut into.

PCE is out on August 29.

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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.