Macro Afternoon

A mid week pause in the “Great Rally of 2018” as most Asian indices treaded water or retreated proper following what was a good lead from Wall Street overnight. This is mainly due to action in the bond market as yields continue to spike, spooking risk managers as they head for safe havens like Yen. Aussie 10 year bonds spiked up 6 basis points to 2.73% while oil prices put on more gains.

In mainland China the Shanghai Composite was doing well going into the lunch break and following the CPI print and Yuan fix but has fallen sharply on return, down nearly 0.3% and just slightly below 3400 points.  The Hang Seng Index is travelling okay though, up another 0.25% to 31088 points. It was doing even better intraday but has moderated these gains into a better trajectory, although note that momentum is starting to wane here:

S&P futures are off slightly as price continues to bunch around the next level of resistance at the 2750 level:

Japanese stocks are mixed given the big reversal in Yen, which gained significantly today. While the broader TOPIX is up slightly, the Nikkei 225 is down 0.2% to 23792 points. The USDJPY pair continues to fall as Yen strengthens on the apparent change in BOJ accommodation, falling down to last week’s session lows just above the 112 handle:

The bulls are seemingly given up here on the ASX200, as it gapped higher and was looking fresh and ready but has sold off continually throughout the day to be down 0.6% to 6096 points. This was mainly due to banks with most divisions of Megabank off about that amount, although Newcrest flubbed more than 2% and the iron ore majors are off as well.

The Aussie dollar is scraping just above its recent tight trading range at the 78.20 level against USD, not wanting to break below trailing ATR support at the 78 handle proper:

The economic calendar is again relatively benign with some UK trade figures, a DOE inventory report and the first round of some major Treasury sales.

Comments

  1. Now, is Funky just so damn good, or what …………..?

    1. ” Have you heard about Shale” ? http://www.nasdaq.com/markets/crude-oil.aspx?timeframe=6m
    .

    2. XJO – and a particular other who, understandably, admits being *disgust*ingly wrong … again … always … forever… etc/etc:
    12th October, with XJO at levels 10% cheaper than now, the legendary FunkyBabes’ buys the Index:
    ** The Traveling Wilbur
    October 12, 2017 at 11:34 pm
    In all seriousness, and much to my disgust, Funky is as right today as he was a month ago. Sigh. It looked really good for the ASX cracking, especially while China was closed, for a while there, but I assure you that as of this week the jammy little b’stard is back in the black. Beggars belief. It’s like a Terminator bourse – no matter what you throw at it, it will not die **
    .

    3. As if that if not sufficient examples of absolute market brilliance, Funky does it again – this time in December = refer https://www.macrobusiness.com.au/2017/12/macro-afternoon-323/
    = “Too” …. for a chuckle, read TTW’s response ……… lol

    Just Too good … all Funked up

      • Hey, we have the same *initials* = TTW

        PeeeeeeS
        Important announcement:
        a. I am calling the top in WORLD markets
        b. I look for [ and, therefore, so should you ] a 50% fall from now, ending in about 18 to 24 months

        As ALWAYS, and forever …. your’s truly.

      • Ignore the Wilbur’s reference [ to anything, actually – but you probably knew that ] …. and Haroldus – on this one.

        Funky is the very likeable , very original and so smart, and the only Bull, on this site. Funky =
        shortened form of ** UpTownFunk ** his original moniker, has been so uncannily correct on the markets, it infuriates – been going for years now, under various other monikers [ = two weeks FREE , then have to change to another name ]

        Too hot – can kiss myself, so pretty

      • And …. he is the one who is now:
        a) Buying deep out-of-the-money puts on BHP [ eg BHPJC8] ;
        b) Buying similar puts on RIO and Woodside;
        c) Buying similar puts on FMG ;
        d) Buying similar puts on XJO, Crude Oil [ this one is going to make one lots and lots of money, soon ] and on S&P 500.

        Why they cut me off after two weeks is really beyond me = I , in my various guises, provide – singularly – the only proper recommendations hereon … silly MB … people will pay money to see my suggestions.

    • The Traveling Wilbur

      You can’t evade real-estate related taxes. From what I can see of lived experience through observation the Federal government never asks anyone to pay any in the first place!

      • The Traveling Wilbur

        Apparently they don’t think SCOMO’s banging the drum hard enough these days. You know sometimes I think he might have potential (e.g. re now doing not so much drum banging) but give it a couple of weeks and he’ll come out and and say something stupid about something or other. Probably renewables.

        PS any entropy fans out there who have a problem with that term or is it just me?

      • Can hardly wait to hear SloMo’s next brain fart after his very recent “company tax cuts will make Australia great again” effort went down in a flaming heap being slammed for a Treasurer to not know the difference between headline, marginal and effective tax rates to out right “they don’t pay tax anyway” chidings.

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