DXY cratered to new lows last night: But the AUD fell as well against everything: Including EMs: All it took was one thinning jobs report. Gold stalled but if both DXY and AUD are going to fall then local miners are in clover: Brent wants to correct but is being held up by the falling
Meh, from Westpac: Market inflation expectations have trended higher over the past two years. However, this has been as much about the pricing-out of deflation risk as it has been the inflation outcomes themselves. It has only really been in the past six months that inflation has shown a sustained lift to target. This occurred
And in a boom be bullish! US inflation came in warm and DXY was routed. I can only put this down to capital chasing risk: AUD was trashed then launched against DMs: And EMs: Gold went nuts and it’s chart looks rip for breakout: Oil rebounded: Base metals, whoa: Big miners, whoa: EM stocks, whoa:
Goldman on firming US inflation before tonight’s CPI: Using our top-down and bottom-up core PCE models, we project that both macroeconomic fundamentals as well as sector-specific factors are likely to push core inflation meaningfully higher this year. …We highlight three key drivers of the core PCE acceleration to 1.8% by end-2018 in our forecast: a 0.15pp
DXY fell sharply last night: AUD was weak anyway against DMs: Mixed against EMs: Gold firmed: Brent fell but held on: Base metals lifted: And miners: Plus EM stocks: But not junk: The Treasury curve flattened: And bund curve: Stocks fell in Europe but lifted in the US: The key was the new “Powell put”:
Via the AFR: As the US 10-year bond rate heads towards 3 per cent, longer-term bonds are looking attractive again, PIMCO’s Newport-based chief investment officer of global credit, Mark Kiesel, said “At that rate it will start to generate interest from insurance companies and pension and funds and importantly, while we do see inflation rising we don’t see it
DXY was soft last night: AUD was strong against DMs: But not so strong as EMs: Gold firmed: Importantly, oil fell: As this monster long has further liquidation ahead: Base metals rebounded: Big miners launched: EM stocks too: Junk bottomed: Treasuries were bid a little: Bunds too: Stocks flew: News on the night was all
Big back-flip from Ray Dalio today that will not surprise MB readers: Let’s start by putting what’s happening within the context of the classic short-term debt/business cycle. What is Classic? In the “late-cycle” phase of the short-term debt/business cycle, when a) an economy’s demand is increasing at a rate that is faster than the capacity
Nice wrap today from Shae Russell: A decade ago, outside of investment banks, almost no one knew of derivatives. Few people had heard of collateralised debt obligations (CDOs) or credit default swaps (CDSs). It was only when the financial crisis nearly crippled global markets that these terms gained wider notoriety. Banks used CDOs to make
DXY firmed last night but not enough: The Australian dollar tumbled against DMs: But EMs fell faster: Gold held on: Oil let go: Base metals held on: Miners let go: As did EM stocks: And US junk: The Treasury curve steepened as only the short end caught a safe haven bid: Bunds were better bid:
DXY roared back last night: AUD was creamed against DM: And weak against EM: Oil was smashed: Gold crumbled: Base metals too: And big miners: EM stocks are going lower: Junk held up but it is a big canary if it goes: Treasuries sold and curve steepened: Bunds the same: Stocks rose then fell: Two
DXY jumped then stabilised last night: AUD rebounded against DMs: But couldn’t keep pace with EMs: Gold was hit: Oil too: And base metals: Big miners snapped back: EM stocks too: And junk: Treasuries lost the bid: Bunds didn’t: And stocks rebounded: It’s all good then! Who knows if the VIX accident is over? Maybe,
Via Zero Hedge: By Charlie McElligott, managing director of cross-asset strategy at Nomura. Fade to Black The “grey swan” we all have spoken about for years—that being the absurd “tail wagging the dog” potential of VIX ETN market structure (inverse and leveraged products) AND the massive growth in “negative convexity” / “vol target” / “vol
DXY lifted last night on safe haven flows: AUD kept falling against the USD: It was mixed against EMs: Gold was soft: Oil was hit harder: Base metals were mixed: Big miners were hammered: High yield broke: However, Treasuries were strongly bid: And bunds: Stocks were smashed -3% and are still falling as I write:
DXY rebounded Friday night: AUD was smashed on the DM crosses: It fell against EMs: Gold was hit: And oil: Plus base metals: Big miners were pounded: EM stocks hammered: Worryingly, US and EM junk cracked as well: Unusually amid the carnage, the Treasury curve steepened: And in Germany: Stocks got flushed: The trigger was
Via the excellent Calculated Risk: On Friday at 8:30 AM ET, the BLS will release the employment report for January. The consensus, according to Bloomberg, is for an increase of 175,000 non-farm payroll jobs in January (with a range of estimates between 150,000 to 205,000), and for the unemployment rate to be unchanged at 4.1%. The BLS
DXY resumed its crash last night: But AUD fell even faster, against all DMs: And EMs: Gold is strangely muted given the USD weakness: Oil firmed on the big buy from the Squid: Base metals loved the falling USD: Big miners yawned: EM stocks fell: Junk is threatening to break lower: As Treasuries cop a caning
Via a US reader today: As an American I don’t like everything he [Trump] says or the way he acts on twitter but the guy didnt become a billionaire by being an idiot. What cracks me up is reading people and the media comments that he is an idiot. He wasnt going to get the
DXY eased last night: The AUD was weak against all DMs: And EMs: Gold fell: Oil lifted for no reason: As US production soars: Base metals held on: Big miners didn’t: EM stocks did: Junk was fine: The Treasury curve flattened: And the spreads to Aussie guvvies are headed for Hades: Bunds flattened too: And
Say what you like about Donald Trump’s rhetoric on trade. The MSM is in a constant meltdown over it. But the fact is he is engineering the fastest reboot of the US/China imbalance that anyone can remember without having to fire much more than a beebee gun. China response has been to let the yuan
Via Goldman: At Janet Yellen’s final FOMC meeting next week, we expect the FOMC to issue a generally upbeat post-meeting statement that includes an upgrade to the balance of risks and a slightly hawkish rewording of the inflation assessment. Taken together, we believe the tone of the statement will be consistent with a hike at the March
The USD is in free fall: CFTC longs rose 7k to modestly long 17k with clear scope to go higher AUD was strong against all DMs: And EMs: Gold remains suspicious: Brent was soft but WTI now wants $70: The US rig count jumped 12 to 759 with more to come: : Base metals too:
Make America unwashed and unpowered again? Yesterday, President Trump slapped tariffs on two of its biggest trading partners, Korea and China, with new charges on washing machines and solar cells in his first major trade “deal”. From Bloomberg: The U.S. will impose new duties of as much as 30 percent on foreign-made solar equipment, the
The USD index tumbled to three year lows last night: But the Australian dollar was sold anyway. Indeed it was dumped against all DMs: The reason was iron ore which took a tumble. Confirmed by weakness as well in the Brazilian real: Gold firmed: WTI hit news highs: But base metals fell and copper slumped
DXY fell last night as the US government shutdown ended: It looks more like a consolidation before another push lower than it does a capitulation bottom. As risk rose over the past few days there was a bid but as it returned it’s gone. That suggests the better things get the more it will fall
The US government shutdown is providing great headlines about Trump’s incompetence – it’s pretty hard to beat shutting your own government down when your party controls the legislative and executive branches – and equal measure to the lack of risk surrounding the shutdown. It will be over in a few days, nothing to worry about
Via BofAML: …expect upward revisions to continue through earnings season, particularly as guidance trends have remained strong as well…we expect more details as earnings season progresses; several companies also indicated they will provide more clarity at upcoming Investor Days. Some early details have emerged from the 20+ S&P 500 companies that announced one-time bonuses, where
Goldman Sachs analyst Dann Struyven has taken a look at the impact of minimum wage increases and the GOP tax bill on wage growth – perhaps the most important factor in maintaining one’s standard of living as price inflation creeps ever-higher (the whole “wages keeping up with inflation” thing). Struyven concludes that short-term wage growth may be negligible outside of the leisure and
While the headlines surround the trajectory of the Australian dollar versus the USD, it’s the Yuan making the rounds as it hits a new two year high. From SCMP: On Monday, the People’s Bank of China (PBOC) lifted the daily yuan reference rate by 0.55 per cent to 6.4570 per dollar, in its biggest daily move since
Welcome to the global blowoff of 2018. DXY is the driver, breaking to three year lows Friday night: AUD flew north of 79 cents: It’s been treading water against EMs: CFTC net positioning blasted from moderately short to modestly long at 5k. Gold is screaming higher as DXY plunges: Oil is tearing the roof off:
