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Kai
, 10 tweets, 4 min read Read on Twitter
$AUDUSD mini thread 1/n

- Aussie, Aussie, Aussie!
- Oi! Oi! Oi!

• it's the worst combination... China in tariff war with the US, global economic slowdown , and domestic housing problems...

• some old correlation gap are misleading:
2/n AUD thread

• everyone who still think AUDUSD is cheap vs "apparent commodity basket" is scratching the head
3/n AUD thread

• true, the RBA commodity basket has a 54% bulk commodities, of which 28% is Iron Ore

• Iron Ore keeps rallying hard, but not because of China's demand, because Vale's tragic disaster in Brazil = supply cut
4/n AUD thread

• therefore the "gap" in chart 1 earlier is misleading

• RBA TWI weighting has a 28% CNY trading partner, and China is in a trade war with US...
5/n AUD thread

• but besides China trouble, and obviously global manufacturing PMIs sitting at 3Y low ...

• domestic issues in the housing market continue, Manufacturing looks ok, Services not good, and construction is red
6/n AUD thread

• thats why [ again this chart] , the domestic housing implosion is leading the pressure for the RBA to cut
7/n AUD thread

• RBA implied rate cuts for this year are high, and got serious momentum the last 6months (yes, same like FED implied cuts)

• meaning, ST rates driving the AUDUSD pair = SFTR 7x last 12M
8/n AUD thread

• 2Y and 10Y yield differtential to US is in a one way street too

• 25D RR though is now losing the momentum and Ozzie starts to look oversold too. 0.72-0.69 was another STFR move
9/end @threadreaderapp unroll
geez... I just re-read my gibberish ...

conclusion:
- charts are great
- connect Macro & Technicals good
- my English sucks royal LOOOL.
- good night.
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