Macro Afternoon

by Chris Becker

Overall a positive day on stock markets in Asia, but we’re not seeing the kind of rises earlier in the week as the risk on mood hesitates. Currencies were largely unchanged, particularly Yen which has seen some reversal of its safe haven buying of late while commodities were equally sanguine.

In mainland China the Shanghai Composite lifted only slightly, up 0.1% to 3384 points as it tries again to melt up to resistance at 3400 points.  The Hong Kong based Hang Seng Index however reversed direction falling about 0.3% as it couldn’t clear the local resistance level at 28000 points:

Japanese stocks had another positive day as the correlation with the USDJPY continued. The Nikkei lifted 0.4% to finish at  19865 points, still poised to break above 20,000 points anytime soon. This might be a target too far however as the four hourly chart of the USDJPY pair shows a possible topping out action here, with local resistance at the 110.25 level firming and momentum rolling over:

S&P futures have retreated slightly after last nights record high:

The ASX200 could not make good on its great start to the week by dropping a few points to finish at 5744 but still remaining above the 200 day moving average. While it surged higher at the open, a late selloff in mining stocks and some of the peripheral banks saw a scratch session, although CBA is doing well here to recover.

The Aussie dollar’s “beautiful retracement” down to ATR support at the 80 handle is effectively over as it slowly melts back up again. However, tomorrow’s jobs numbers and Chinese FAI prints may be a fly in the ointment here, so watch out below:

The data calendar includes a smattering of final number prints for Europe and US overnight, namely German CPI and industrial production, but these are all factored in. The August crude oil production print could be interesting however and give WTI crude the catalyst it needs to get moving.

Comments

  1. Now, dimwits [ what a concentration of those on here – unbelievable … * Birds of a feather flock together *] it’s like this :
    AUD to 83-85 ( Hardon Brenton MEMBER ) ; AUDJPY to 90 ; CBA to 90 ; XJO to 6300 and FMG to 8.50 …. that’s it.
    Property = 5-7% pa next 2 years ( Coming MEMBER … gosh, that image !!!!! ).

    These are per earlier other posts, by same = dead, buried and He rose again

    Q ………………………………………. idiots

    • Man I read that earlier too and I was thinking the same thing. I reckon our financial system is nearing the end of its useful life and the big wigs are looking for a way out in a way where the general populace will not blame the banks as they did last time. This way they’ll have some sort of excuse. It’s a scary thought to commit to big debt atm our foundations like employment, finance and security could shift in a way we haven’t experienced yet being a youngin myself.

      Maybe I’m just paranoid and i should double down like everyone else

  2. NEW ZEALAND: SOLVE HOUSING CRISIS ? … VOTE LABOUR

    ‘We are in the depths of a teaching crisis’ – future generations at risk due to housing, debt and low pay | 1 NEWS NOW | TVNZ

    https://www.tvnz.co.nz/one-news/new-zealand/we-in-depths-teaching-crisis-future-generations-risk-due-housing-debt-and-low-pay?auto=5574593076001

    https://www.facebook.com/TheProjectNZ/

    Newshub The Project On Line Poll This Evening
    75% support Labour
    25% support National

    Housing – New Zealand Labour Party

    http://www.labour.org.nz/housing

    … extract …

    Remove barriers that are stopping Auckland growing up and out

    Labour will remove the Auckland urban growth boundary and free up density controls. This will give Auckland more options to grow, as well as stopping landbankers profiteering and holding up development. New developments, both in Auckland and the rest of New Zealand, will be funded through innovative infrastructure bonds. … read more via hyperlink above …

  3. TailorTrashMEMBER

    ……a little spruke received this avo from local McGrath agent ………..a message from the oracle himself ……
    …not surprised more people going to government schools ……those Grammar or PLC bills just can’t be funded after the mega mortgage payments ……………so let’s package up the taxpayer funded schools link them to house prices and flog them off to ………we all know who ………..more and more the community is a commodity ……..shame that ………

    “More kids in public schools raises property prices
    By John McGrath

    More parents are choosing to educate their children in government schools, which is a complete reversal of the 40-year trend towards private education, according to the latest Schools Report from the Australian Bureau of Statistics. This change began in 2015 and has been increasing since then.

    The number of students staying through to Year 12 has also increased from 75% in 2006 to 84.3% in 2016, which means family home owners in prized school catchments are staying put longer.

    So what does this mean for real estate? In short, a lot!

    The desirability of homes within the catchment zones of the best public schools has been growing across Australia.

    A key factor was the introduction of the My School website launched in 2010, which provides directly comparable performance data for every public school based on NAPLAN results and other factors.

    The ability to directly compare schools means family buyers can handpick a top public school for their kids and give them guaranteed entry by simply moving into the catchment zone.

    The effect of high quality schools on local property prices is highlighted in the latest Domain School Zones report, which show house price growth data by catchment zone rather than by suburb.”

    • Jake GittesMEMBER

      Everything in Straya is determined by housing so when two people decide after a few drinks to get intimate they really ought be looking at the Domain School Zones data in case they have a fruitful union in order to then choose the right house in the right location. Then they can get down to the business. It’s that type of strategic planning that defines the Strayan way of life.

      There are plenty of examples of autocratic regimes where ideology was applied in the same way, where all action was purposed to a cause. With housing Straya is the equivalent of the DPRK

  4. The Traveling Wilbur

    So we’re all going to die. Here I am staring at a graphic on ABC24 trying to figure out why Trump’s Net Approval rating *drops* 0.6% when the segment is about approval going UP after the two recent hurricanes (from 38.5 to 39.7%)… well… let’s just say the baseline NET approval figure is negative (that is -) 16.4%. And if you need help figuring out why this ‘drop’ is therefore wrong please go back to Manly where you came from. God this country…

  5. “Financial Post

    New report suggests to get ready for several “years” of housing retrenchment nationally with Toronto bucking the trend
    Garry MarrGarry Marr
    September 12, 2017 5:20 PM EDT
    Filed under:
    Real Estate
    Single-family house prices may be overvalued by as much as 60 per cent in Toronto, but cooling measures may take a bigger bite out of markets away from the country’s largest metro area, says a new report.

    Moody’s Analytics maintains the brakes are being put on the housing market across the country and Canadians need to prepare for “several years of retrenchment” with at most as 1.3 per cent annual price growth per year over the next half a decade.

    “Exact turning points are difficult to predict, but the combination of restricted mortgage lending, taxes on foreign purchases in the largest metro areas, and the expectation of higher mortgage rates means that house prices are likely to experience a slowdown in the next few years, especially if speculative home purchases in Toronto and Vancouver are reduced or shut down,” writes Andres Carbacho-Burgos, in the eight page report, released Tuesday.

    After rate hikes, Canadian housing braces for ‘biggest rule change of all time’
    Canada’s most expensive house on sale for $35M and not even $5M extra tax expected to deter foreign buyers
    Meanwhile, ratings agency DBRS said in a report Tuesday that booming housing markets in British Columbia and Ontario boosted job growth over the past decade in sectors such as construction, home-related retail and real estate by 28 per cent — faster than other parts of Canada. DBRS said if house prices fall dramatically, other sectors of the economy should be able to absorb those jobs thanks to strong economic growth and steady population gains.

    In the past two months, the Bank of Canada has raised the overnight lending rate 50 basis points, while the prime lending rate at most financial institutions has jumped from 2.7 per cent to 3.2 per cent. Long-term rates have also been trending upwards, and some suggest the central bank is not done and will raise rates another 25 basis points in October.”

    http://business.financialpost.com/real-estate/new-report-suggests-to-get-ready-for-several-years-of-housing-retrenchment-nationally-with-toronto-bucking-the-trend

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