Australian Dollar

DXY was stable Friday night: The Australian dollar was weak: Gold eased: Oil crashed: Base metals were mixed: Miners did OK: EMs fell: Junk did OK: The yield curve steepened as the “blue wave” becomes a reality: Stocks fell sharply, especially growth: In news, US jobs were pretty weak relative to expectations.

Overnight markets were relatively bullish overnight, although Brexit troubles gave Pound Sterling traders fits, while mixed economic data from the US and the lack of COVID-19 stimulus didn’t hurt Wall Street bouncing back.

  With Chinese markets on holiday, and Japanese markets on the technical fritz, the mood is hard to gauge across Asian share markets despite the late lift on Wall Street overnight on more stimulus hopes.

  As markets continue to discount the shitshow that is the US presidential election, shares across Asia retreated with broad losses, as the very positive start on Monday becomes a distant memory.

Last night saw a misstep in equity markets as the latest German CPI print shooting lower than expected, firmly into deflation territory on weaker demand, coupled with uncertainty over the next US fiscal stimulus package.

  A mixed message here in Asia with some advances, some losses and a lot of scratching around doing nothing with stock markets unable to translate the very positive start on Monday into something more substantial.

Last night saw the good start to the trading week in Asia translate into big gains across Wall Street and in particular Europe, with optimism surrounding the potential new fiscal stimulus in the US.

DXY fell away last night: The Australian dollar lifted: But fell against EMs: Gold firmed: Oil too: And metals: Miners yawned: EM bounced: Junk stopped screaming: Yields are flat: Stocks took off again: Westpac has the wrap: Overnight Market Wrap Global market sentiment: US and European equity markets rose, the S&P500 currently up 1.6%.

  It’s risk on and damn the torpedoes with stock markets surging after the weekend gap, starting with a very positive mood here in Asia.

Friday night saw a surge on Wall Street despite a very disappointing durable goods order print for August, with all eyes on another stimulus package from Congress.

Ahead of the anticipated announcement of the Federal Governments trashing of responsible lending laws by moving oversight of financial lending from ASIC to APRA, Gunnamatta spoke with David Llewellyn-Smith and Leith van Onselen about the implications of the move, and how this positions the Australian economy.

The mixed mood on markets is moving to the positive side, outside of China, with most share markets here in Asia rebounding further than Wall Street did from overnight on the back of potentially more fiscal stimulus from the US congress.

Hopium is wafting back into risk markets as the possibility of another fiscal stimulus package in the US got Wall Street off the hook as it teeters on terminal support.

Risk sentiment reversed course sharply again overnight, with uncertainty over the US economy via the Federal Reserve the key driver of a selloff on Wall Street despite solid PMI’s in the US.

DXY is back in a big way.

The rebound from overnight was only followed through on local markets with the rest of the Asian risk complex still lacking the confidence to ride the BTFD wave.

This makes more sense to me than 90 cents: AUD … is worst-placed for a US-China decoupling, the RBA’s Debelle just gave a speech in which he said a lower AUD would be beneficial to support the economy, and that higher public debt levels (which the RBA will support) are not a problem.

Via Bill Evans at Westpac: In a speech yesterday the Deputy Governor of the Reserve Bank gave a fairly clear hint that the Board is set to cut the cash rate and other key policy rates at its October Board meeting.