DXY to the moon:
AUD trapdoor:
Room to fall as CFTC shorts have puked:
North Asia is no help:
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All commodities were hit:
Metals hedge turns hilarity:
Miners too:
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EM is at support:
Junk is stuck:
Yields spiked:
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Stocks eased:
The culprit was another strong month of US jobs:
Total nonfarm payroll employment increased by 272,000 in May, and the unemployment rate changed little at 4.0 percent, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in several industries, led by health care; government; leisure and hospitality; and professional, scientific, and technical services.
…The change in total nonfarm payroll employment for March was revised down by 5,000, from +315,000 to +310,000, and the change for April was revised down by 10,000, from +175,000 to +165,000. With these revisions, employment in March and April combined is 15,000 lower than previously reported.
Wages were also solid but remain trending down:
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This is another soft/no landing print that drove DXY higher.
As we tip into H2, DXY is looking good for more gains.
I still expect disinflation to win out and the Fed to cut ultimately, but the looming election is now directly in the way.
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With its focus on tariffs and China bashing, we can expect DXY to stay strong and CNY to begin to break down.
As the ECB leads the easing cycle, dragging down EUR, US exceptionalism is still the flavour of the day.
This is an environment for a weak AUD.
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