DXY finally rebounded as EUR fell:
That triggered reversals across all markets. AUD down:
Commods down:
Miners (NYSE:RIO) down:
EM stocks (NYSE:EEM) down:
Junk (NYSE:HYG) down:
US yields up:
Stocks down:
The approach of the Fed put the jitters through markets. It will probably remain hawkish despite likely reducing its hiking pace to prevent an over-loosening of financial conditions.
However, inflation is cooling fast. CorePCE has faded to 0.3% per month:
Though Core Services are still sticky:
As wage growth is still strong but is also cooling fast:
The market has already rallied on these numbers What will matter for the Fed is how it frames the terminal rate and any easing ahead.
I doubt the dot plot will be dovish yet so that may support a return to AUD weakness.