Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Austrailian dollar smashed with everything

au.investing.com/analysis/austrailian-dollar-smashed-with-everything-200508330
Austrailian dollar smashed with everything
By David Llewellyn-Smith   |  May 19, 2022 08:59
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Everything but DXY, that is:

 

AUD was pulverised:

Oil fell:

Metals too:

Big miners (LON:GLEN) reversed:

EM stocks (NYSE:EEM) gave way:

Global junk (NYSE:HYG) is screaming RECESSION AHEAD:

The Treasury curve was steamrolled:

And stocks were smashed:

Westpac has the wrap:

Event Wrap

US housing starts in April remained elevated, at an annualised 1.724m (est. 1.756m, prior 1.728m revised down from a cycle high of 1.793m). Building permits were also elevated at 1.819m (est. 1.814m, prior 1.870m).

Canadian CPI in April rose 0.6%m/m (est. 0.5%m/m) and 6.8%y/y (est. unchanged at 6.7%y/y), but the core components were notably firmer.

Eurozone CPI in April was finalised slightly lower at 7.4%y/y from its flash reading of 7.5%y/y, while core was unchanged at 3.5%y/y.

UK inflation data for April spiked higher as national utility and household energy provider caps were lifted. Headline CPI rose +2.5%m/m (est. +2.6%m/m) and +9.0%y/y (est. +9.1%y/y, prior +7.0%y/y) – a 40-year high, and core CPI rose 6.2%y/y (as expected, prior 5.7%y/y). PPI rose 14.0%y/y (est. 12.5%y/y, prior 11.9%y/y).

Some key earnings downgrades added to the turn in sentiment in equity markets. Target (NYSE:TGT) shares fell as much as 25% (the most since October 1987) after it reduced its full-year forecast for operating income margin. Walmart (NYSE:WMT) shares fell 11% (the most since October 1987) after quarterly profit missed analysts’ estimates and it lowered its full-year outlook for earnings growth. Rising costs featured in both reports.

Event Outlook

Aust: Given that weekly payrolls suggest weather and holiday events dampened jobs growth in April, Westpac anticipates employment to lift by 20k for the month. The participation rate holding flat at 66.4% should see unemployment rate move downwards (Westpac f/c: 3.9%).

NZ: Higher oil and dairy prices are will likely keep the PPI elevated in Q1. The 2022 Budget should show the Government’s books are in a relatively good shape given the impacts of COVID-19.

Japan: Volatility in machinery orders is expected to persist with supply issues continuing to cloud the investment outlook (market f/c: 3.9%).

US: Initial jobless claims are set to remain at a very low level (market f/c: 200k) and the May Phily Fed index should continue to reflect relatively healthy business conditions (market f/c: 15.0). Limited supply and cooling demand are a headwind to existing home sales in April (market f/c: -2.1%). The leading index is expected to point towards a slowing of economic momentum in April (market f/c: 0.0%). The FOMC’s Kashkari will speak on inflation.

The US economy is still not buckling. Retail and housing volumes are rolling but not enough. The financial market panic is actually now easing conditions for the latter.

The Fed is locked in for 50bps in June and July meaning that everything is going to be stress-tested and something will eventually snap.

Oil is still feeding inflation in at above 50% per month and must be broken.

Europe is buggered by its war and energy shock. China is reeling as OMICRON crashes property. EMs are on their knees as DXY rages.

Nothing changes unless or until the US consumer breaks and adds a trade shock to everybody else’s woes.

AUD still going lower.

Austrailian dollar smashed with everything
 

Related Articles

Chris Becker
01.07.22 Macro Morning By Chris Becker - Jul 01, 2022 1

Risk sentiment continued to lack confidence overnight as downward volatility returned to equity markets as Wall Street fell nearly 1% in the wake of poor consumer spending data,...

Austrailian dollar smashed with everything

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email