DXY is consolidating its wildly overbought position.
AUD is at the verge of complete breakdown anyway.
CNY is bleeding out slowly. JPY pulling a Costanza.
Gold and oil look very troubled.
Copper too.
Big miners are breaking down.
EM is caput.
Junk is OK but the razz is gone.
As the US curve re-inverts.
Stocks only go up.
Charlie McElligott at Nomura sums it up nicely.
The usual headscratchers from the “professional fainting society” seen in pockets of financial media breathlessly forecasting imminent doom– “Trump Turmoil” / “Trump Roils Markets” / “TrumpTariff Threat” / “Trump Deja Vu Jolts Traders Across Markets”….
In the meanwhile, the Markets which are purportedly being roiled: ES +.22%, DXY -.19%, Gold +.20%, TY -.04%.
This has always been the “Art of The Deal” playbook since Trump 1.0, start high and hard with negotiating leverage and intent…and go from there, which is frankly exactly what (then Treas Sec Candidate, now “THE” dude) Scott Bessent told us over a month ago before the Election—hence, zzzzzzz.
Yep. I expect tariff announcement to be early and aggressive. It will then be over to China to deal.
It will surely initially respond with deeper CNY devaluation. Otherwise, it’s bringing a knife to a gunfight.
That is where I see the next big leg down for AUD.
Conversely, CTAs are very long DXY already.
This thing has to pause to chop some wood soon.
Though markets are also long AUD for some ungodly reason, so the currency remains vulnerable.
