DXT is threatening to break out.
AUD still has CNY support, but JPY is down the dunny.
Gold is breaking. This may be a leading indicator that oil is going to take off. Or it’s the DXY.
Actually, the entire Crap Complex is bracing for a strong DXY. Dirt:
Fugly double tops on miners.
EM freefall.
EM junk looks nervous.
US yields a jackknife!
Stocks smashed.
This is but a taste of the hell DXY will unleash.
The Fed now has another problem: jobs.
Total nonfarm payroll employment increased by 172,000 in May, and the unemployment rate was unchanged at 4.3 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in leisure and hospitality, local government, and health care. Employment in
financial activities declined.
Total nonfarm payroll employment increased by 172,000 in May, similar to the gain of 179,000 in April. In May, job gains occurred in leisure and hospitality, local government, and health care. Employment in financial activities declined.
In May, average hourly earnings for all employees on private nonfarm payrolls rose by 12 cents, or 0.3 percent, to $37.53. Over the year, average hourly earnings have increased by 3.4 percent. In May, average hourly earnings of private-sector production and nonsupervisory employees rose by 8 cents, or 0.2 percent, to $32.31.
Wage growth below,
The upside here is that there appears to be little danger of a wage price cycle as AI offsets labour demand.
Fed chair Warsh may be able to keep the hawks at bay if this persists.
The key remains oil. DXY will track it, and for everybody else, it will get twice as expensive, twice as fast.
Still, if that happens, I expect growth worries to rise quickly too.
The US is not going to run out of oil. Japan, Europe, and Australia are.
I still say the AUD rally is kaput and if my base case of oil rising towards $150 in July plays out, it will soon be back in the 0.60s.
