DXY held the gains:
AUD was smacked:
CNY is deteiorating again:
Oil eased. Gold fell:
The Crap Complex of dirt, miners, EM and junk all puked:
As Treasury yields bull steepened:
Which hammered stocks, especially tech. The support levels don’t look likely to hold:
It is not complex. The Fed has blown up the Treasury market, and all assets are repricing for higher yields.
Given the mounting economic headwinds everywhere, I don’t think the bull steepening makes any sense. But if that’s what it takes to finish off the financialised business cycle, then so be it.
The Fed is also cornered by oil and will have to take it on. To me, that says bear not bull steepening but whateves.
The always bullish stock market squeezed an extra year from the business cycle, but it is now priced for fantastical growth in 2024. That needs to be repriced for falling earnings and higher yields, a squeeze on P&E.
While this adjustment takes place, expect DXY to run higher with yields and safe haven flows.
The AUD is protected by immense short positions, but it is going lower as long as this rerating transpires.