Macro Afternoon

by Chris Becker

The positive lead from overnight as US stocks make new record highs has translated into further gains here in Asia today. The catalyst for this risk on mood is a lower than expected insurance bill from Hurricane Irma and a falling Yen and other safe havens returning cash to risk managers as Korean tensions continue to ease.

In mainland China the Shanghai Composite is lifting steady at the close, basically unchanged at 3379 points as it fails again to rise above resistance at 3400 points.  The Hong Kong based Hang Seng Index is pretty much in the same situation, up a handful of points and unable to build on its breakout yesterday, still below its own resistance level at 28000 points:

Japanese stocks continue to surge with the Nikkei rallying again, up another 1% to finish at  19776 points, poised to break above 20,000 points anytime soon. This is all due to the Yen with the USDJPY pair slowly melting higher after its recent big bounce, now at 109.60 and respecting local support:

S&P futures are steady after last night’s solid move higher and may consolidate here as the economic calendar is light on:

The ASX200 had another solid session zooming higher on the open and staying there all day to finish up 0.6% at 5746 points and remaining above the 200 day moving average. CBA was a big winner again on short covering, up over 2% while the iron ore trifecta all lifted in unison.

The Aussie dollar is having a beautiful retracement, right down to ATR support at the 80 handle from where it looks like bouncing already as we go into the London session. I’m targeting the Monday morning gap down level at the 80.60 zone here:

The data calendar only has one release to watch out for tonight with UK CPI printing for August.


      • lol The last major place to fall to Paco’s fascists was….. Madrid after an epic siege of 2.5 years – after the Basques, after the Catalans.
        And there were heaps and heaps of fascists waiting to help him in Catalonia. But the Catalan’s crypto-fascist nationalists have convinced everyone Madrid was with Paco. Great propaganda.

      • Just pointing out there was no simple divide by regions. The areas that were Franoist at the start of the war simply had no choice. Madrid was still the great “Castilian” city back then.. If you look at this map you’ll see warfare continued in the mountains in so called “Francoist” areas like Galicia right up to the early 1960s.

      • Yeah that’s right the great Castilla city, home to the Bourbons, that didn’t bother but could have revolted right up to 1960 and beyond…

      • You’re a hard man to please. Franco was a very thorough piece of work. He deliberately dragged out battles and the war to maximise casualties, and it didn’t stop after they surrendered or the war ended.

    • The Traveling Wilbur

      ?What’s Spanish for “Gracias Kim Jong Un” and “What’s got dos thumbs and a big grin [finally]”¿

    • and people seriously believe australian government wont hold bad mortgages?

      There will never be a substantial fall in australian house prices

      • Comming….

        If you want to make accusations, the least you could do is back it up, saying incoherent has zilch gravitas. I was pointing out the FIRE sector, wonky neoclassical and AET economics and dodgy loan processes quite a long time ago.

        disheveled… and you – ?????

      • How many mortgages does BoJ hold? How many bonds? How much equity positions? So no Coming I don’t think RBA will hold mortgages

      • The Fed holds a specific kind of mortgage and that didn’t stop it sliding into crash.

        The ECB holds no mortgages. The RBA will absolutely capitalise the banks if it comes to that, but mortgages? Pffffft.

    • The Traveling Wilbur

      So the people now own the means of profiting from capitalism which in turn owns the means of production. Winning! Really. An alt-right implementation of socialism that might actually benefit society. Maybe.

  1. Ooops-I-did-it-Again

    Coming MEMBER

    Why does that just sound so wrong … so yak ……… but it/he/she/other exists ……….. here on MB – special place ; shame, it/he/she/other must feel at home here – obviously; where else but here could that happen?

    Pay your way, no matter.

    PS They just kicked me out, again. I’ll be back

      • Mig-i….

        Have you had your smart pill today – ?????

        Everyone I point out, link too, my own 2c, pro Sanders and Corbyn, anti neoliberalism, et al…. and you have the cheek to throw the right wing nut job label at me….

        disheveled….I think you need to have the stuff QC’ed at some lab…

  2. If I should re-subscribe to MB, it certainly won’t be due to the type of garbage in this thread’s comments. Just ridiculous.

    • Just just to recap, if you chose to spend on access to the prohibited articles to freeloaders on this site, it won’t be for access to comments on the freely accessible comments pages?

      Well ladida Sherlock

  3. The Australian dollar is now at fantastic levels to short the hell out of it …. falling to 50 cents American, soon.

  4. From Tepper …….
    The BOJ now owns 75% of Japanese ETFs
    The SNB is now a hedge fund owning $85bn of US stocks
    The ECB is funding M&A deals at zero yield

    • The Traveling Wilbur

      There’s only two possible outcomes for a continuing capitalist solution. This is the least worst (and looks a lot like Christmas. I mean socialism).

  5. The AGL imbroglio gets better and better.

    We now have Labor saying AGL is a private company and it’s only obligations are to its shareholders to maximise profits. Liberals say AGL operates with a social licence and has social (economic) obligations to the population to keep power affordable and the lights on.

    We now have Labor saying “how awful” a Liberal Government is attempting to tell a private business how to operate, hands off! (I know, the irony). And we have a Liberal Government prepared to intervene because “electricity is an essential service” (I know, the irony).

    All the while the key problem is years of interference by all Governments rushing the uptake of renewables via quotas and subsidies without a thought for the end game: expensive electricity supply, supply which cannot be guaranteed going forward.

    Meanwhile AGL and Vesey are doing very nicely indeed, courtesy taxpayers and politicians. Can’t blame them for cleaning up. It’s almost forced down their throats.

    • …but AGL might have a problem, cocky holding all the cards. Last year it cut off electricity to 74,000+ households and this could play out badly vis a vis Vesey’s $6.9m salary and the poor. Smart minds may then ask what is the outcome to AGL if it shuts down Liddell, some might suggest a crunch on energy supply pushing prices even higher (AGL profits) and/or adding more renewables to the mix, taxpayer subsidised and Government approved. We know where that leads. Rinse and repeat.

      Btw, apparently these renewables subsidies are expected to hit $30 billion by 2030?

      • The Traveling Wilbur

        No. Smart minds wouldn’t ask that.

        Smart minds would ask “If that logic works for coal power production, then surely it also works for gas power production – which is a much bigger problem so maybe that’s where the focus of political will should be directed?”.

        That’s what smart minds would ask – but that’s exactly the question you don’t want asked and has you quaking in your elegantly styled imported Italian footwear which is why you’ll conflate every issue in sight until the moment passes.

    • The Traveling Wilbur

      No. That’s not the problem.

      The problems are: greed and politicians at state level who sold large chunks of the goegraphy of this country down the river as an easy ‘fix’ for budget problems.

      That’s the problem.

    • You could argue the Government of the day holds the ultimate social licence yet the LNP have absolutely no intent on honouring that licence or the conditions that go with it.