The pa in equities closed lower. Pa in Aud/usd closed lower after, on the week too. The next big support rung is 80.22. 80.22 is larger than 81.35. Losing this one is more indicative. Taking with equities drop. Dow and Aj should find some relief here. The big question is bounce or not, and will it hold after? All the knife cuts to equity's is adding up. From the tariffs, to threat of stopping bond buying. I anticipated stocks needing a correction. I didn't anticipate the new tariffs. So I didn't see, the slowing bond purchases in the mix. The more knife cuts, the chances increase. I am sure more rheteric to come.
The fact that bonds rise adds to U.S. deficit quicker. It makes financing a home more expensive. It can drive home prices lower. While monthly payment remains the same (smaller home for the same note). Reaction is, builders build smaller homes. Builders need less materials and workers. Building suppliers sell less materials. All means less workers. Less workers to buy cars and so forth. It's all connected to the economy. The same thing would happen in Australia or anyone else with a exporting economy. Even China would be affected domestically.
This is why its a good idea to watch Aud/Usd. Many more things could be added to above. I don't have the time to write a book. Just giving a heads up on the current situation. 3 or 4 raises were anticipated. If China stops buying U.S. bond buying rates will go up without the Fed raising. Credit card rates as well as most borrowing will cost more. This decreases demand on products. A Chicken Little forcast, if China stops buying bonds.
