DXY faded Friday night.
AUD bounced.
CNY too.
Oil and gold sideways.
AI metals stalled.
Big miners trying.
EM ouch.
Junk OK.
Yield eased.
Stocks dump and pump.
It’s all about the government shutdown now.
- Scott Bessent, US Treasury Secretary, is on the hustings saying growth might halve in Q4 and prices fall away.
- Economic advisor, Kevin Hassett, says it could be negative.
There are accelerating moves to end it as well.
Meanwhile, the loon has an air of desperation.
Bessent tried to make sense of that by saying it could fund anything and everything.
So, we have a stalling consumer economy, with gestures at increasing fiscal policy, with trenchant inflation and a faded jobs market running into a pausing Fed.
Summing these up, more fiscal would normally be currency bullish, but this is so vague that I’m not buying that, and the economy is slowing so fast that the Fed is more likely to be forced to move sooner rather than later.
All up, this is probably DXY negative; however, as we’ve seen so far, weakness in China is likely to weigh on any AUD rise.
The longer the shutdown goies, the more pressure for AUD and vice versa.
