Australian dollar flushed away
David Llewellyn-Smith | Oct 07, 2022 10:18
DXY to the moon:
AUD flushed to the lows:
Oil is up with the OPEC cut:
Metals down:
Miners (NYSE:RIO) too:
EM stocks (NYSE:EEM) were soft:
Junk (NYSE:HYG) rolled:
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Yields piled higher:
Stocks sank:
It’s US jobs tonight, which is always pretty random., but there are signs of strength in the US economy. GDPNow has bounced bigly:
Driven largely by services:
Which should support the BLS:
However, employment reports everywhere are a random walk for trading purposes so there’s no guarantee.
That said, economic strength is consistent with sticky inflation. The Fed’s Nowcast is still firming:
| Inflation, month-over-month percent change | |||||
|---|---|---|---|---|---|
| Month | CPI | Core CPI | PCE | Core PCE | Updated |
| October 2022 | 0.72 | 0.53 | 0.54 | 0.42 | 10/06 |
| September 2022 | 0.32 | 0.51 | 0.30 | 0.40 | 10/06 |
| Inflation, year-over-year percent change | |||||
|---|---|---|---|---|---|
| Month | CPI | Core CPI | PCE | Core PCE | Updated |
| October 2022 | 8.04 | 6.58 | 6.21 | 5.12 | 10/06 |
| September 2022 | 8.20 | 6.64 | 6.24 | 5.11 | 10/06 |
I can’t see any Fed pivot in these numbers. The BLS will need to be a shocker to turn AUD up.
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