DXY sagged Friday night:
![](https://d70-invdn-com.investing.com/content/85987784ef26a2218f82f01f3b9b206b.jpeg)
AUD launched:
![](https://d70-invdn-com.investing.com/content/1ffdd85ff918752412aca01b03f1066d.jpeg)
![](https://d70-invdn-com.investing.com/content/baf7618b0bea81b970f627302460e320.jpeg)
And dirt:
![](https://d70-invdn-com.investing.com/content/005788776f538e724c2cdc05545c1c4f.jpeg)
Big miners (NYSE:RIO) jumped:
![](https://d70-invdn-com.investing.com/content/7fb16a545377590b022e98e06e052528.jpeg)
EM stocks (NYSE:EEM) firmed:
![](https://d70-invdn-com.investing.com/content/61d74e80ffb58205e1ab71d5ba90b5f0.jpeg)
Junk (NYSE:HYG) too:
![](https://d70-invdn-com.investing.com/content/3552e058292ffb3a0cda5cd4f3693823.jpeg)
The Treasury curve steepened markedly:
![](https://d70-invdn-com.investing.com/content/4cebbfe562ae7b64e61a6920d4abd916.jpeg)
And stocks took off:
![](https://d70-invdn-com.investing.com/content/e9e205c11db90a0716059c46efceeafc.jpeg)
Why? This:
Some officials are more eager to calibrate their rate setting to reduce the risk of overtightening.⁰
But they won’t want to dramatically loosen financial conditions if and when they hike by 50 bps (instead of 75).⁰
This meeting could allow officials to get aligned on next steps— Nick Timiraos (@NickTimiraos) October 21, 2022
“A half-point hike at this meeting would result in a dramatic loosening of financial conditions no matter what language they paired it with,” said @jasonfurman ⁰
“But by December, you can keep financial conditions very restrictive even with 50.”— Nick Timiraos (@NickTimiraos) October 21, 2022
Friday night’s action gave the Fed its answer. Soft pivot and reflation will fly. AUD included.