DXY had a better night.
AUD is caught between fear and greed.
CNY up.
Gold down, oil up.
AI metals look toppy. Copper H&S?
The chosen one, not.
EM shaky.
Junk is increasingly a worry as AI issues debt. Bad signal for risk.
Yields up on the US reopening.
Stocks dumped and pumped again.
Goldman on the AUD.
We still think that AUD’s fundamentals support greater outperformance versus both USD and CAD, but acknowledge that risk drawdowns may be a bigger headwind than anticipated.
The Dollar has come under pressure more in recent days, but that has also come alongside worse performance in cyclical G10 currencies like AUD, NZD,and CAD.
If broad Dollar underperformance continues to be led by equity downside, AUD strength vs USD or CAD could have its limits.
NZD may be the more attractive funder for AUD longs for now, until the New Zealand economy begins to turn, as AUD has underperformed other currencies on risk off.
Longer-run, we think that AUD should benefit broadly from our more bullish view on CNYand Chinese growth.
That roughly mirrors my thoughts except on China. The growth outlook there is clearly worsening. So, my longer-term outlook for AUD is more bearish.
