Australian Dollar

Strong economic data from the US is haranguing risk sentiment with the USD strengthening once more on the presumption that the easing may ease off sooner than expected.

Asian stock markets are somewhat mixed given the stumble on Wall Streets return from a long weekend overnight, with overextended Japanese stocks falling back the most as expected while mainland Chinese risk markets remained closed for NY holidays.

Wall Street returned from its most ironoic holiday over night and stumbled, pulling back European stocks and potentially upsetting the groove that started in Asian equities at the start of the trading week.

Asian stock markets have doubled down on their great start to the week with gains across the region, including the return of some Chinese markets.

Wall Street was on holiday last night but that could not stop the bulls with European stocks putting in a twelve month high as positive risk sentiment across the risk complex cannot be held back.

There are three sources of strength for the Australian dollar when the greenback falls.

Asian stock markets have started the week in an ebullient mood given the solid lead from Wall Street on Friday night with the USD given back ground against the major currency pairs as US Treasury yields continue to spike higher.

Friday night saw a continuation of positive risk sentiment across the risk complex with Wall Street lifting higher as it goes into a long weekend holiday.

The Australian dollar lifted again Friday night despite local economic woes attached Dictator Dan’s renewed Melbourne lockdown.

Asian stock markets are generally lower given the wavering confidence on global stocks with Chinese bourses closed due to NY holidays.

Initial weekly jobless claims in the US spiked a little higher than expected, with continuing claims also climbing higher but that didn’t dampen all risk spirits with Wall Street edging slightly higher.

As stated, my outlook for the Australian dollar is ongoing gains into the low-80s this year.

Asian stock markets are generally higher except for local stocks despite continued mixed leads from Wall Street and European stocks overnight with local currencies still strong despite the USD coming back a little against the majors in the wake of the lower US inflation print.

I am consistently surprised at how thin-sliced Wall Street analysis is.

US inflation data for January was much lower than expected, which took the edge of the weak USD meme running through currency markets as stocks also stumbled on Wall Street .

Outside of Japan, Asian stock markets have re-engaged to the upside despite the mixed lead from Wall Street overnight with local currencies still surging against a weak USD.

Will other corporates chase Tesla into Bitcoin?

For many years now MB has promoted the notion that macroprudential tightening can suppress house prices and stop currencies from following interest rates higher.

Steady as she goes across most risk markets overnight, although Wall Street wobbled after European bourses stalled out due to the higher Euro.

Asian stock markets are somewhat mixed despite the strong lead from Wall Street overnight with Chinese bourses leading the way while local stocks fell back sharply as the Australian dollar accelerated against the short squeeze on USD.

Overnight we saw BTC hit new all-time highs as Elon Musk disclosed that it has bought $1.5bn and would in future accept BTC for the purchase of Tesla cars.

A lack of events on the economic calendar but the potential for further US fiscal stimulus kept sentiment high overnight with new record highs on Wall Street.

Has the Australian dollar already topped? Most on Wall Street do not think so. JPM sees the recent correction as over: I had written extensively last week about the dislocation between G10 FX (lower) and stocks (higher) and on Friday we saw that correct in style as the USD sold off everywhere.