Australian dollar parties as WWIII cancelled

DXY was smashed as WWIII was cancelled.

AUD dumped then pumped following the Iranian popgun retaliation. Couldn’t keep up with EUR.

Woe is oil. The glut is large. No Hormuz, no bueno for oil.

Bueno for growth!

Even the Kodiak grizzly let up for a day.

EM meh.

Junk party!

Bond party!

Stock party!

There is an underlying oil glut, but it does not serve Iranian interests to let it fully express itself. So, I would still expect some minor skirmishes in the Straits to keep the geopolitical premium up.

Will that be enough to turn DXY? Despite the huge short, I will believe it when I see it.

Cheapo energy is good for EUR.

I still see AUD rising from here as the world flees Donald Trump.

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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.