Australian Dollar

Via Damien Boey at Credit Suisse: An un-natural vision of stability. The US trade deficit, a proxy for foreigners’ US dollar (USD) saving, is exhibiting remarkable stability of late.

By Chris Becker  Wall Street rebounded overnight, spurned on by a surge in home sales and the usual quarter/end year rebalancing meme.

Wall Street’s slump on Friday has survived through the weekend to start the week here in Asia with a similar selloff, with most stock markets down 1-2% across the region.

Via ZeroHedge: After three months of relentless contrarian bearishness by institutional investors, even as retail investors first, and hedge funds subsequently (latest HF net leverage is 99%-ile) flooded into stocks, large institutions such as vanilla mutual funds and pensions finally capitulated to the Fed which is now openly pushing stock prices higher.

By Chris Becker  Wall Street stumbled on Friday night with yet another reversal in sentiment as the US failed response to the coronavirus with yet another record high number of cases has seen many States begin to again restrict economic activity.

Following the bounce on Wall Street overnight, Asian stocks came back to end the trading week with relatively strong sessions.

By Chris Becker  The plunge protection team stepped up to the plate again last night on Wall Street as a stunningly bad weekly jobless claim print and another record high number of new COVID-19 cases in the US  wasn’t real enough for shares to selloff.

Following the rout on Wall Street overnight, Asian stocks took a tumble today, not helped by Chinese stocks taking the day off with both European and S&P futures in the red as traders go defensive before the amateurs start selling off.

By Chris Becker  Exuberance turned to fear overnight, and depending on what side of reality you listen to it was either Biden’s fault for leading in the US presidential polls (which means 2/5ths of SFA) or the growing 2nd wave that’s actually the unfinished 1st wave of the coronavirus.

DXY suddenly rebounded last night: The Australian dollar was weak: Gold held above the breakout line but if this gets moving it won’t: Oil was smashed: Dirt fell: And miners: Plus EM stocks: Junk is hilariously high Bonds were bid: Ass stocks were hit: It’s all pretty straight forward.

Bit of a nothing session here for stocks in Asia today with only mainland Chinese and their satellite Australian bourses rising while the rest of the region puts in scratch sessions.

By Chris Becker  Exuberance is exceeding expectations across the risk complex as a swathe of economic activity data overnight pointing to a turnaround in nearly virus free Europe excited stock markets and other risk assets the world over, with tech stocks leading the orgy of buying.

  A bit of drama to keep us traders awake today as yet another Trump nincompoop blurts out the wrong thing, sending futures to the floor before a hasty “I didn’t really mean that” retraction saw risk markets square up again.

Has Peter Navarro went off-reservation?

By Chris Becker  Risk sentiment is only positive on Wall Street due to a surge in a handful of tech stocks, as market breadth stretches out as ridiculously thin as the overall PE valuations, with the NASDAQ up through 10,000 points overnight while European bourses slipped.

It’s a flat start to the trading week as risk markets continue to absorb a lot of hesitation and concern from weekend stats showing the coronavirus isn’t slowing down as expected, with emerging markets and the failed US response creating a lot of “second wave” risk.

By Chris Becker  Risk sentiment continues to fade with another hopeful session on Wall Street dashed on Friday, selling off into the close as the risk of the “second-wave” (aka giving up on the first wave) surging throughout the US, let alone other emerging countries weighed once more.

DXY was up again Friday night and is signaling a rise in risk: The Australian dollar is starting to fall against all major DMs, more risk-off signal: It’s also falling against EMs: Gold roared back to its break out line: Oil is hanging in there.

Probable chart captions: “There is no second wave.