DXY goes “CRACK”. EUR to the moon!
AUD follows EUR but not fast enough to catch it.
Lead boots held up.
Amusingly, oil is going to pull that drill, baby, drill.
Goldman will make you pay for the energy transition as copper rises DXY reflation.
Big miners false dawn.
EM up.
Junk firmer.
Yields higher against oil. Stupid.
Stocks rebounded.
The great rotation is afoot.
US growth data weakened again with a conspicuously weak ADP report.
Meanwhile, who are you, and what have you done with the Germans? Goldman.
Yesterday (March 4) the heads of CDU/CSU and SPD announced an agreement to pass an unprecedented fiscal package including three pillars:
(1) an exemption of defence spending in the main budget surpassing 1% of GDP from the debt brake limits.
(2) a EUR 500bn (11.6% of GDP in 2024) off-budget infrastructure fund that is planned to be disbursed over the next 10 years, which amounts to roughly 1% of GDP in annual infrastructure spending.
(3) an increase in the structural deficit allowed for the states from the current level of 0.0% of GDP to 0.35%.
They will probably pass parliament quickly.
The Chinese increased the deficit, too, but it was largely rubbish. It’s not pivoting to domestic demand yet.
Anyway, it is the perfect storm for an AUD rebound with DXY falling into global reflation and a historic shift in Europe driving that currency higher.
With positioning bearish again, another dead cat bounce is at hand.
