DXY is hovering.
AUD dumped and pumped on tariff headlines.
CNY has rolled.
Gold to heaven, oil to hell.
Metals turned casinos.
RIO is breaking out of the big bear on the debasement trade. If it mined gold, I might agree. It doesn’t.
EM dubious.
Junk trying at the centre , not so much the periphery.
US bond yields are breaking down.
Stocks nervous.
The Fed is warming into its task.
Federal Reserve Chair Jerome Powell signaled the central bank may stop shrinking its balance sheet in the coming months, an important shift necessary to preserve liquidity in overnight funding markets.
The Fed chair also indicated labor-market prospects continue to worsen, a message that supports investors’ expectations for another interest-rate cut this month.
The US labour market is under a number of different strains.
- Trump lunacy is inhibiting capex decisions, unless you are AI.
- Trump tariffs are inhibiting margins, so costs are getting squeezed, unless you are AI.
- AI has started replacing entry-level jobs, which is hitting graduates and youth.
In short, the only thing growing is job-replacing AI.
The Fed faces worse inflation than Australia, but these days, jobs outweigh prices.
How the Aussie central bank ended up becoming so much more hostile to workers than the Americans is something you will need to ask the architects of the mass immigration economy.
Not all of these forces are coming Downunder. Our weak entry-level jobs market is a matter of fiscal tightening and too many migrants, plus a central bank that refuses to mention the fact.
As for AUD, volatility rules until Trump meets Xi and gives him everything that he wants.
