The culprit was JOLTS which broke, suggesting that US recession is building:
The number of job openings decreased to 9.9 million on the last business day of February, the U.S. Bureau of Labor Statistics reported today. Over the month, the number of hires and total separations changed little at 6.2 million and 5.8 million, respectively. Within separations, quits (4.0 million) edged up, while layoffs and discharges (1.5 million) decreased.
I still don’t trust the falling DXY. If the US is going into recession then so is Europe, which is a second derivative global growth economy like Australia’s.
Moreover, assuming the US recession, the banking shocks have only just started. Sure, we’ve led into the bust with US regionals seizing up, with the (NYSE:KRE) right back at the lows today and threatening breakdown:
But the entire banking sector will be hit with a wave of defaults as the economy shrinks in due course.
This is going to be as bad in Europe as it is in the US as trade and financial shocks radiate outwards.
This is a classic safe haven DXY setup.
Whether it actually plays out, who knows? This is why I have been talking JPY as the safe haven alternative. But it still has implications for plays like gold and AUD.
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