DXY was soft last night:
AUD was flogged:
Dirt fell:
Miners (NYSE:RIO) were hosed:
EM stocks (NYSE:EEM) too:
DM junk (NYSE:HYG) is not well. EM did better:
The Treasury curve took off:
And stocks slumped:
That is a very big change from 2022 dynamics. Yields and stocks fell together. The culprit was a mini-bank panic in the US as three entities delivered bad news:
- Silvergate Crypto was wound up.
- There’s a run on Signature Wank equity owing to its blockchain leadership.
- And JPM went down on unfortunate connections with Jeffrey Epstein.
This all looks more idiosyncratic than it does systemic so I am not sure it is the beginning of the final washout. But it is precisely the kind of thing that will ultimately happen.
US banks (NYSE:IYF) were smashed. European banks tumbled. Leaving Australian banks, the most exposed to the looming recession, massively exposed:
It’s still all about tonight’s NFP. But this is a taste of things to come for bonds, stocks, and the Australian dollar.