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Trumpy wants to bring in his tax cuts (inflationary) while the...

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SonicBlast

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20/11/17

07:36

Post #: 28937066
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Originally posted by sydshare ↑

From a FA view, no not F all .
The sell off in Oz/Us from 81.20 is based entirely on the bond mkts.
Back then investors looking for high yields bought oz/us to benefit from the "Carry Trade"with such a wide difference in yields. The US was then looking at stable rates and RBA were almost certain to hike further. Now that is over with RBA on hold for another 12 months and the Fed hiking next month and 3 times next year (according to Goldman Suchs) which would for the 1st time in years put their yields above ours. So the carry trade is now no longer and even reversed.

Sure , Commodity prices and China are also factors but Chinese growth is baked in , and any signs of weakness there and it's another reason to sell it.
Commodity prices are having less influence despite rallying strongly the OZ has ignored it as yields are front and centre.
There is a growing view that the Fed is about to strangle the US economy and cause a world wide recession...what price then OZ/US$!?

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Trumpy wants to bring in his tax cuts (inflationary) while the Fed want to bring in the notion of interest rate hikes (inflation leash). I doubt very much if the Fed are going to strangle anything. They have “alerted the market” now for over 12 months.
The Chinese are shifting the balance.

Sonic
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