Australian Dollar

For the past week or so, the global bond back-up has put equities to the sword. In particular, the tech bubble has quivered dangerously as rising yields turned growth stocks from TINA (there is no alternative) to a bubble fit to burst.

Asian stocks have tried to follow the rebound from overnight markets, but have failed across the region, with this relief rally seemingly short lived.

Last night Bitcoin bounce was triggered by a new Bitcoin report by Citi. The report was written for (and by?) children under the age of six.

Shares have bounced back from their volatile end of week shock following the bond market implosion, but the same can’t be said for currencies or indeed bonds, with Treasury yields lifting again overnight.

For a few months now I have been making the point that the Australian dollar rally is on unusually thin ice for this stage of the business cycle.

Asian stocks have rebounded sharply across the region, starting the week on a more positive tone compared to the carnage on bond and currency markets at the end of last week, with the falls on Wall Street seemingly contained already as S&P futures bounceback in kind.

Some claim that Bitcoin (BTC) is a medium of exchange.

The bond market implosion is having broader impacts, particularly on currency markets as a run to safety to the USD on Friday night saw major currencies plummet in value, taking some stock markets with them.

For the past couple of months, I have been warning of three things.

Asian stocks have fallen sharply across the region, in a correlated response to the big reversal on Wall Street overnight as the bond market flipped out.

The real action on overnight markets is not Gamestop shares or Bitcoin, but the international bond market, which spiked yet again as a weak Treasury auction overshadowed solid US economic news.

The Australian dollar has been rising very quickly in the past few weeks.

Asian stocks have rebounded firmly across the region, in a correlated response to the bounce (aka BTFD) on Wall Street overnight as central bankers soothed nerves.

Wall Street’s nerves were calmed, soothed and appeased by the Fed last night as Chair Powell patted and stroked the risk complex as it purred along nicely again.

The RBA has been very explicit about why it has renovated its entire monetary policy framework.

Asian stocks have fallen sharply across the region, responding to the poor lead from Wall Street and then the wafer thin assurances from the Fed overnight, as S&P futures tumble amid some really fragile risk sentiment.

US Treasury Secretary, Janet Yellen, weighed in on Bitcoin last night, clearly on the negative side.

Wall Street is getting quite nervous, having suffered five straight days of declines in a row and was all set to completely rollover last night, but some calming words from the Fed chair abated that decline at the last minute.

Overnight the Australian dollar fell back a little from its recent charge.

Asian stocks are rising despite the poor lead from Wall Street overnight, as oil prices rise to new highs and bond yields continue to spike with S&P futures looking to claw back last night’s losses.

The NASDAQ dragged Wall Street down overnight with a very unsteady start to the trading week across the major risk markets.

Readers will know that we have been expecting a scary steepening of the bond curve.

Another mixed start to the trading week with Asian stock markets going all over the place in response to a mixed lead from Wall Street on Friday night, as the ructions from bond and currency markets outweigh stocks.

For those who are sceptical that China is on the verge of delivering a threat to the USD with the world’s new reserve currency, today marks another cynical day.

JPM: The virus crisis, by boosting money supply as well as demand for an “alternative” currency, has supported both gold and bitcoin over the past year.