Australian dollar heads for hard landing

DXY is holding on as Liberation Day passes.

AUD firmed.

Lead boots are heavier.

Oil and gold stalled.

Base metals are pointing at a hard landing.

Big miners, big bears, plod on.

EM meh.

Junk funk not funky enough.

But bonds bid.

Aiding stocks, which rose moderately.

US JOLTS were Goldilocks without showing much harm from DOGE.

The ISM was a stagflationary shocker at 49, with new orders down 3.4% to 45 versus inventories up 3.5% to 53.4.

As the new orders/inventory ratio collapses, that has a hard landing written all over it.

It may be that the employment shock we are all looking for might come after a growth hit, not before.

The US “hard landing” scenario is back, and that does not bode well for AUD.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.