Ian Reynolds
BRICS Gold-backed Currency
Looks like a deliberately leaked news nugget. Much anticipated but so far not officially documented. August's BRICS conference should tell us how a new commodity-backed currency will be used in trade between some of the largest emerging market countries.
Outside of the USD | Swift system.
BRICS membership expansion [Reuters]
BRICS, which now consists of Brazil, Russia, India, China and South Africa, is considering expanding its membership, and a growing number of countries have expressed interest in joining.
BRICS summit in August [SA Gov] -it's slow to load
The biggest, longest, de-risked trade i've seen was the convergence of EU and Italian yields as Italy joined the EU. A multi-year phenomenon.
Is there a similar trade here?
Source Willem Middelkoop [Twitter]: Twitter post here [Twitter]
Russia confirms BRICS will create a gold-backed currency [Litco]
BRICS Bank CFO Sees No Move Any Time Soon Toward Common Currency [Bloomberg]
Global Rates Rising Strongly
Rates rise globally as US numbers shock markets. The ADP Non-Farm payroll report, as viewed and ignored by market participants since inception in 2006, stunned markets by coming in at 497k new jobs in June vs market estimates of 228k. ADP is Automatic Data Processing Inc who produce the report.
Private businesses in the US unexpectedly created 497K jobs in June 2023 [Trading Economics]
ADP Payroll report is private company payrolls whereas the Non-Farm Payroll report is private companies and government, produced by The Bureau of Labour Statistics. [BLS]
Even the market favourite, Non-Farm Payroll coming in lower than expected, with unemployment unchanged at 3.6%, couldn't stop the bond sell-off ( wage growth slightly higher didn't help ).
US 10 year yields back to 2009 levels
US Dollar
BRICS news and US rates backing up without strengthening the USD, confirms the view of Druckenmiller etc that USD must weaken. Against what though?
Chart of the DXY above show a confluence of resistance at 104.60 driving pricing down towards 100.50. There will be a big drop if support breaks.
Australia
AUS interest rates backing up and, if they're following the US lead, then there's another 200bps to go in 10 year to take us back to 2009.
Tenants scramble for cheap options - and send unit rents soaring [AFR]
The suburbs setting new price records [AFR]
A second pause by the RBA, a politically motivated action - not wanting bad news while a new Governor is announced in July, confirms they have lost control of the economy. A second wave of inflation will create a deeply divided country. Divided by wealth. We've seen this movie before and there's no happy ending.
ASIC searched Binance Australia offices in derivatives probe [AFR]
Japan warns it could dump Australian LNG for Alaska [AFR]
This Week's Economic Indicators [London time]
