Macro Afternoon

by Chris Becker

A sea of red for Asian stocks today following the poor lead from Wall Street overnight as falling commodity prices on the back of a resurgent USD cascading into a mining stock selloff. 3Q Australian GDP data came in lower than expected which gave the local index a small reprieve as the Aussie dollar reversed sharply.

In mainland China the Shanghai Composite has fallen straight through key support at 3300 points, down nearly 1% to be at 3275 points. As I said yesterday if this level broke, the next support zone at the 3200 level beckons quite fast. The Hang Seng Index is doing even worse, down nearly 1.2% to 28481 points. My target at the 28500 point level has been reached already, with the next point at 28080 or so very close – but I think this is a little too fasT:

S&P futures are slipping as to be expected with the risk off mood, falling below the ATR trailing support level at 2630 which must remain firm here or this dip could widen:

Japanese stocks were the worst in the region as Yen zoomed higher against USD. The Nikkei closed nearly 2% lower to 22195 points, confirming the bearish double top pattern I’ve been warning about on the daily chart.  The USDJPY pair was looking firm here at the 112.50 mid zone but has sold off sharply in the last couple of hours. We could see a fall below the 112 handle and down to the prebreakout area at 111.50 or so:

The ASX200 gapped down again at the open on the poor lead from Wall Street but recovered somewhat on the soft GDP print, as lower interest rates continue to support the market. The afternoon session was more tepid and it sold off again, losing 0.5% to 5943 points. The main culprits here were miners, with the big-not-Australian BHP losing more than 2% with Rio Tinto off nearly 3%

The false breakout last night on the RBA decision by the Australian dollar has been completely wiped out and then some by todays GDP print, reverting well below the 76 handle against the USD. This takes it on a trajectory to former support at the 75.60:

The data calendar includes the Canadian central bank meeting followed by a DOE crude oil inventory report.


  1. The Traveling Wilbur

    No! I am haroldus!

    And BTC is only up a measly 5% or so today. Meh. Only 12k+ per coin now.

    Apples anyone?

  2. these are for Wiley

    nothing says quality, above-board, top grade procurement processes like needing a full year of extra work (in Australia!) on those spiffy new trains built in india.

    and staying on the topic of QLD and the Commonwealth games, but adding that walking short, channel 7 into the mix:

    30 to 50 million for the exlusive rights to the games and then committing 1200 staff as well ! I’d love to see that business case that underpinned that channel 7 bid.

    • Mining BoganMEMBER

      Lots and lots and lots and much advertising money from developers pushing GC towers of course. Imagine sitting there in an euphoric state after watching ‘Cracker’ Jack Forbisher pick up a bronze in the lawn bowls when BANG, there it is. An exiciting and scantily clad ad for the Bud Tingwell Apartments on Kirra. Who could resist dialing the 1300 number and registering some interest?

      • Mining BoganMEMBER

        See, there you go again, thinking that financial reasoning underpins Strayan business decisions.

      • given my poor opinion of humanity overall, you’d think i would be better at deeply discounting our business elite’s competence 🙂

      • The Traveling Wilbur

        Please tell me you had to Google the Australian Mens Lawn Bowls team before you posted that comment. Please.

      • The Traveling Wilbur

        @Monty You must see the term “value-chain” on a daily basis. When it’s juxtaposed with an Australian company, how do you manage to restrain the laughter when you’re working?

      • very few orgs that we work with are doing anything meaningful or even thinking about value chains, which won’t surprise you at all. but i work for a smaller consultancy so we don’t have the coverage of the big tier ones. I’m sure all the big companies and govt agencies do have someone that has read ‘the lean enterprise’ and is trying to drive change. god knows thoughtworks have made enough money from australian businesses

        those few that we are working with in this area… well, let’s just say that there is a lot of upside 😉

      • The Traveling Wilbur

        and govt agencies do have someone that has read ‘the lean enterprise’ and is trying to drive change

        Yes. But this is quite difficult to do in any effective way from inside a locked filing cabinet, stuck in a dis-used lavatory, with a sign on the door saying “Beware of the leopard.” which is where most of the aforementioned employees who attempt such things are destined to spend the remainder of their ‘careers’. Unless they’re​ working on someone elses’ ideas from, well, above… of course.

    • Mining BoganMEMBER

      Speaking about stealing from your country’s future, check out the story below it with the photos of an Iranian lynch mob.

      Might forward that to Andrew Robb…

    • Was the only way the Barr Government in the ACT could justify the light fail. Take the ‘value capture’ out and the light fail is a rate payer sinkhole.

  3. TailorTrashMEMBER

    From Corey’s latest Dear Punter email

    “Interestingly, the government’s approach seems to have adopted a lot of the measures that Australian Conservatives have been talking about for the past ten months.

    We have repeatedly called for the severing of the ties the major parties have with agents of foreign governments. Now it seems they are heeding our warnings.

    This saw Labor playing catch-up, claiming credit for stopping the China extradition agreement which simply demonstrates how untrustworthy Bill Shorten is.

    He knows full well that the disallowance of that directive was led by Australian Conservatives and that the Opposition were belatedly embarrassed into supporting our position.

    We applied principle and values in doing the right thing and that delivered a meaningful outcome. We will continue to do so and hope to have many more policy wins in 2018.”

    Wonder how much Chinese money (the stolen stuff ) went into scuttling that bill to get the thieves hiding in Straya sent back ……..nice to see principle and values in action.

    • Just watching Nicholas Reece (yet another high-immigration promoting leftie) insisting that Australian’s quality of life has improved in every single measure. We need to double-check our arithmetic on finances and affordability.

    • TailorTrashMEMBER

      ……and they are not militarising those Islands they built in the SCS either …….it’s also a fabrication ……

      • Currently in Argentina at the moment, jet lagged so can’t sleep that well and browsing articles etc.. but was on Qantas flight and saw good Vice documentary on rising tensions in the region. Shows a Phillipines charter plane flying over 1 of these Islands and over radio Chinese navy is telling them to leave the area, despite being recognised as international waters.

        Also showing how a lot of other Attols are inhabited by citizens of other nations who are paid to live on them to prevent China claiming them as annexing them would be an act of war.

        Interesting times lie ahead, same Video shows Putin’s land grab of Crimea and how US influence over global geo politics is being challenged. Throw Syria and North Korea into the mix and we live in interesting times.

      • The Traveling Wilbur

        @Gav Isn’t it amazing, how seemingly intelligent civilizations keep fighting over the same shotty pieces of land millenia after millenia.

        What’s next? The EU banding together and occupying (where) Corinth (was) again?

        Seriously depressing and a bit sad.

      • TailorTrashMEMBER

        Yes HB55……I have no doubt the Islands and their fighter hangers are well and strongly fabricated from steel and concrete …….but any stories about their actual exustance or militarisation in the western press are mere fabrications “based on Cold War ideology “