Australian Dollar

Via Zoltan Pozsar at Credit Suisse: The FOMC should forget about r* for the moment and focus on Sagittarius-A* – the supermassive black hole at the center of global dollar funding markets.

Not quite a bath of blood, but its been a red day across Asian stock markets in the delayed weekend response to the tremendous selloff on Wall Street on Friday night.

The Australian dollar was smashed this morning as expected and has since bounced off the 10 year low of several weeks ago: Bonds are back at and through the highs: XJO is down moderately but is well above its rising trend line.

By Chris Becker  The dead cat bounce is now over as the orange mirkin couldn’t put any life back in, swamping the Chinese with tariffs and a tirade on Friday night, sending Wall Street into a frenzy.

DXY was smashed Friday night.

Asian stocks have shrugged off the poor confidence from overnight and are bidding higher going into the weekend close.

By Chris Becker  No room for optimism on overseas markets last night as the lack of direction in Asia yesterday translated into mild selling on both sides of the Atlantic.

Stock markets in Asia are oscillating between small losses and tiny gains, with traders looking to the Fed again as it holds it symposium tonight in Wyoming.

By Chris Becker  Some more stability or instability depending on your point of view returned to equity markets overnight with the Fed minutes absorbed without much fuss as no bad macro news equating to higher risk sentiment.

The bounce has deflated here in Asia although Chinese stocks are just holding on to the inversion in risk sentiment overnight with the USD gaining slightly today.

By Chris Becker  The bounce is over!

DXY was down a little last night as EUR bounced.

The bounce continues as stock markets across Asia lift again following last night’s rally on Wall Street, with the currency market relatively quiet although some USD weakness has crept in late in the session.

DXY is breaking out.

The bounce is on as equity markets in Asia catch up to the relief rally from Wall Street on Friday night, with the bond market selling off slightly, temporarily staving off concerns over yield curve inversions.

Via Robert Rennie at Westpac: Westpac A$ ‘fair value’ down 7% so far this quarter, with the 12% drop in Westpac export weighted commodity price index over the same period being a key driver.

By Chris Becker  No news means good news for risk markets with Wall Street rallying on Friday night, with currency markets stabilising although Pound Sterling got a bit excited on more hard line Brexit gyrations.

DXY was up Friday night and looks close to break out.

Some stability has returned to risk markets as bond yields rise slightly while the USD firms against commodity proxies and the Yuan proper.

By Chris Becker  Risk markets remain teetering on the edge overnight with US stocks treading water, buoyed by a better than expected retail sales print, as traders work out what to do in the face of global recession fears.