DXY broke support last night as EUR rallies:
The Australian dollar was strong against DMs:
But not EMs:
Gold is readying another push higher:
Oil is nailed to $40:
Dirt lifted:
Miners to the moon:
EM stocks jumped:
Junk too:
Yields are cratered:
Stocks broke out everywhere:
The only chart that matters to AUD is fading a little in significance as Australia’s virus blundering takes its toll:
The dynamics are easy to read. Risk lifted on MOAR:
A new coronavirus relief bill being crafted by Senate Republicans and the White House would tie school funding to classrooms reopening and is likely to include a version of the payroll tax cut sought by President Trump, a person briefed on the package said Monday.
As details of the legislation emerged, Trump met in the Oval Office with Senate Majority Leader Mitch McConnell (R-Ky.) and House Minority Leader Kevin McCarthy (R-Calif.). The president said discussions were going well as the administration and congressional Republicans aim to form a unified front before launching contentious talks with Democrats on the last major relief bill before the November election.
Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows plan to meet with House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles E. Schumer (D-N.Y.) on Tuesday afternoon in what could serve as the opening of formal negotiations. Both sides on Monday appeared far apart, but Mnuchin said he was hoping for some resolution by next week.
And EUR lifted on MOAR:
European Council president Charles Michel has proposed large increases to the rebates that so-called “frugal” EU countries receive on their contributions to the bloc’s budget, as part of a plan to break the deadlock on the multibillion coronavirus recovery plan.
The compromise, which Mr Michel sent to delegations meeting in Brussels on Monday evening, settles on a figure of €390bn in grants for stricken countries under the recovery programme.
The frugal member states that include the Netherlands, which had been holding out for a lower figure, would receive substantial increases in rebates they receive on their budget contributions as part of a possible deal.
It’s mostly old news and isn’t even very large but there you have it. Risk was helped along with tech upgrades and vaccine scuttlebutt. Remember that a rising EUR is always AUD bullish.
Iron ore remains an AUD tailwind as well though it is very much reduced:
The AUD will clearly keep rising so long as the risk trade does, though, equally clearly, the correlation is weakening as our own virus blundering intensifies.
When the Sydney lockdown comes, it will prove a serious headwind for the currency.
