Australian dollar back to the moon!
David Llewellyn-Smith | Mar 18, 2022 09:42
DXY is copping a post-FOMC shellacking:
Triggering an AUD mini-boom:
As commodities rebound:
Miners (LON:GLEN) popped:
EM stocks (NYSE:EEM) too:
Junk (NYSE:HYG) not so much:
Get The App
Curve flattened!
Stocks added to yesterday’s gains though slowed:
Westpac has the wrap:
Event Wrap
US industrial production in February rose 0.5%m/m (as expected). Manufacturing production was firm at +1.2%m/m (est. 1.0%m/m, prior +0.1%m/m). Philadelphia Fed business survey rose to 27.4 (est. 14.5, prior 16.0), with solid gains in new orders, employment, shipments and prices paid. However, the six-month outlook pulled back from 28.1 to 22.7. Weekly initial jobless claims were close to expectations at 214k and continuous claims at 1.419m. Building starts in February rose to 1.769m (est. 1.700m), with permits at 1.859m (est. 1.850m).
Eurozone CPI for February was finalised slightly higher at 5.9%y/y (prior 5.8%y/y), although core was unchanged.
The Bank of England raised its policy rate by 25bps to 0.75%, as was widely expected, but guidance was less hawkish than markets had expected, and one member (Cunliffe) dissented in favour of an on-hold decision. The statement tone was cautious regarding the impact of supply distortions and surging inflation on consumer and business confidence and activity.
Event Outlook
Japan: February’s CPI result is expected to move beyond pre-pandemic levels, highlighting the need for robust wages growth (market f/c: 0.9%yr).
Eur: Elevated import costs are set to sustain the European trade deficit (market f/c: -€9.0bn).
US: Another fall in existing home sales is anticipated for February as the strength in demand continues to outpace the rebuild of inventory (market f/c: -6.2%). The February leading index should meanwhile reflect the US’ robust economic momentum (market f/c: 0.3%). The FOMC’s Barkin will discuss the economic outlook; Bowman is due to speak too.
More “sell the fact” then. I thought the Fed was very hawkish so I do not expect it to last very long.
We are in the typical late-cycle period when everybody keeps dancing even though the music has stopped.
The AUD is one of those cavorting on tables amid the gawking onlookers.
We all know where that ends.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.