Australia’s Currency Drastically Weakened by a Minsky Moment

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The strong U.S. jobs reports failed to buoy the DXY index, as the ongoing bank crisis in America overshadowed it.

AUD was decimated against the other currencies. Traders are holding onto their Aussie dollars more than they have been in the past two years.

The prices of gold and oil ascended as the miners (NYSE: RIO) unexpectedly dropped below their base point. On top of this, E.M. stocks (NYSE: EEM) appear to be in a volatile state.

Junk bonds (NYSE: HYG) demonstrate a positive outlook as long as the DXY index decreases. Treasuries were incredibly desirable due to an increase in their curve’s steepness.

The market is feeling the squeeze as U.S. employment remains robust, with wages increasing by 0.5% each month- a figure far too elevated for the Federal Reserve to overlook.

According to the U.S. Bureau of Labor Statistics, nonfarm payroll employment experienced a significant increase in February, with 311,000 new jobs created and an unemployment rate just slightly up at 3.6 per cent. 

“A hotter wage number could spark selling in both stocks and bonds, while the market may not react as much if the payrolls number misses the forecast.” said Michael Schumacher, head of macro strategy at Wells Fargo.

This encouraging news signals that businesses continue expanding and hiring across the country.

The leisure and hospitality, retail trade, government, and healthcare sectors reported impressive job increases, while information, transportation, and warehousing experienced decreases in employment.

According to the revised data, total nonfarm payroll employment experienced a decrease of 21,000 in December and 13,000 in January. The revised number for December is now +239,000, while the figure for January has decreased from +510,000 to +504,000.

The recent revisions demonstrate that employment gains over December and January combined were lower than reported initially by 34,000.

The Federal Reserve has finally made a move that will have substantial implications, completely reshaping the landscape for regional banks (NYSE: KRE).

The Federal Deposit Insurance Corporation (FDIC) eventually ended the disastrous Silicon Valley Bank, essentially a crypto slush fund. It still caused significant damage to the trustworthiness of smaller banks before its closure.

This sector is particularly susceptible to downturns in commercial real estate and liquidation events involving Treasury holdings and large depositors. Get ready for more stories of bank runs from this segment very soon.

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