The Australian dollar burning returns

The USD firmed up overnight:

Commodity currencies were mixed with the Aussie weakest again:

Gold hung on, just:

Brent rebounded:

Base metals look ready to bust the Trump bubble:

Big miners too:

EM stocks took a bath:

High yield did better:

US bonds were sold:

European spreads widened:

And stocks lost a few points:

The Aussie dollar sank into the 71s for a time. Why is it so damn weak? I know I’ve predicted it but not so fast given the terms of trade rocket is still in force so the discounting of the currency is quite something:

This could mean that markets:

• share my view that the bulk boom is a bursting bubble;
• that a big sentiment swing against the Aussie is underway;
• I wonder as well about the role of increasing US-China tensions.

Anyway, bring it on. 60 cents next year as the USD runs riot, EMs take it in the neck and commodity deflation returns.

Cycle bottom outlook remains sub-50 cents and probably post-float lows.