Macro Afternoon

by Chris Becker

The short covering trade continues as Asian stocks follow the positive overnight lead by Japan as investors turn their eyes to a different American impeachment crisis in Brazil. Commodities rose a little as the USD wavered slightly after its bounce back last night.

In China the Shanghai Composite is steady going into the close, remaining at 3090 points, unable to climb back above its once critical support level at 3100. In Hong Kong the Hang Seng Index is up 0.3% to be maintain a level above 25000 points:

Japanese stocks only put on modest gains as the initial gap up higher was thwarted by a stronger Yen throughout the session. The Nikkei closed up 0.2% higher, still crawling along above its pre-breakout level at 19500 points. The USDJPY pair has slipped back to the 111 handle unable to gain traction above the high moving average on the four hourly chart, where I’m watching the low at 111.10 to possibly break here:

S&P futures are steady as Trump gets ready for his first overseas tour, hopefully taking some volatility with him. I’m watching the low moving average here closely tonight to come under pressure:

The ASX200 was the worst performer in Asia, down 0.2% to close at 5727 points in a very scrappy session as miners traded gains with losses by most financials.

The Aussie dollar is maintaining some strength here above the 74.50 resistance zone, recovering from the smackdown on the overnight trade. The 74 handle must hold here if this little rally is to continue into the next part of the economic data cycle:

The data calendar tonight concludes the week with a whimper, namely Canadian CPI and an oil rig count in the ‘States. Have a good weekend and spare a thought for President Trump who reckons “No politician in history, and I say this with great surety, has been treated worse or more unfairly.”

Yeah, like Mandela or Aung San Suu Kyi.

Poor thing. He really puts the “man” in “man-child.”


    • The Traveling Wilbur

      Stephen Colbert for Prime Minister? (of Canadia).

      If Trump then All else is possible.

      • Colbert is a US citizen, but he would be awesome

        and if citizenship isn’t an issue (can anyone prove Trump is even human) I’d love to see Arnie answer the call and come back into politics with a run for president

      • alterbrainMEMBER

        Being an effective president requires more than good intent. Arnie can be governor but not President ( not born in USA)

  1. (New Zealand economist) Shamubeel Eaqub: The grim reality of NZ’s housing unaffordability is hidden |

    … extract …

    … The simplest measures, like house prices relative to incomes, best explain declining home ownership in New Zealand. … read more via hyperlink above …

    Shamubeel Eaqub: ‘Denials of a housing crisis are now simply lies’ | Radio New Zealand News

    Opinion – Every government policy to make housing affordable since the early 1990s has been a failure, and it’s time the political classes actually delivered on their responsibilities, writes Shamubeel Eaqub.

    Housing in Auckland is extremely unaffordable.

    The latest Demographia International Housing Survey confirmed what we know – house prices in Auckland have risen much faster than incomes. So much so, that Auckland is the fourth least affordable city in a survey of 92 (major) cities around the world. … read more via hyperlink above …

    Housing through the decades, what is affordable? | Newshub

    … extract …

    … But both Shamubeel Eaqub and Hugh Pavletich say that to accurately measure housing affordability the simplest and cleanest measure is to look at the ratio between household income and house prices. … read more via hyperlink above …

    2017 13th Annual Demographia International Housing Affordability Survey

    … extract … Dr Oliver Hartwich of The New Zealand Initiative within the Introduction …

    … I first became involved in housing debates in that year when I was a researcher at London think tank Policy Exchange. I remember very well how difficult it was to put a figure to
    housing affordability which is also internationally comparable.

    Demographia’s ‘median multiple’ approach closed this gap. It firmly established a benchmark for housing affordability by linking median house prices to median household incomes. It is as simple as it is ingenious. And it is probably the index I have cited most often in my career.

    The ‘median multiple’ is not a perfect measure because it does not account for house sizes or build quality. But it is the only index that allows a quick comparison of different housing markets, and it is the best approximation of housing affordability measures we have to date.

    So first of all, my congratulations and thanks to Wendell Cox and Hugh Pavletich: You have done the world a great service with your annual surveys and with your advocacy for housing affordability.

    When John Lennon met Elvis for the first time he said, “Before you there was nothing.” I feel the same way about your housing affordability index. Thank you. … read more via hyperlink above …