Macro Afternoon

An unimpressive result from the Chinese trifecta of mid tier data, alongside a poor lead from Wall Street overnight saw Asian stocks sell off across the board. An equally unimpressive jobs report locally saw the Aussie dollar flounder after its mild selloff against the USD in the wake of last nights FOMC meeting.

The Shanghai Composite continues its slump, falling 0.4% lower to 3039 points, now on track to have another crack at falling below terminal support at 3000 points proper. The Hang Seng Index has tumbled even further, falling 1.2% to close at 30371, almost reaching the intersection of its weekly uptrend line and daily ATR support at 30000 that must hold:

S&P futures are falling alongside Eurostoxx, as everyone gets cautious going into the ECB meeting tonight:

Japanese stocks couldn’t escape the selloff as Yen was bid strongly against USD instead of buying stocks. The Nikkei 225 closed about 0.9% lower,  closing at 22738 points, setting up powerful overhead resistance at the May high. The USDJPY pair is dicing with the 110 handle and looks set to finish the week where it started, only giving the intraday traders anything to write home about:

The ASX200 didn’t do as badly as I expected, falling only 0.13% to finish at 6012 points as a result, just above key support at the 6000 point barrier.  The Aussie dollar however is looking ready to selloff once The City opens with a poor showing against a fairly okay – but structurally worrisome – unemployment print. This is the lowest session low for the week and 75.40 or so my target here as negative momentum accelerates:

The data calendar doubles down tonight with the ECB meeting, with all eyes and ears on Super Mario in the press conference thereafter. We also get retail sales and initial jobless claims from the US.

Comments

  1. Central bank carnival over as Powell Fed goes on the warpath … Ambrose Evans – Pritchard … UK Telegraph
    … behind paywall …

    https://www.telegraph.co.uk/business/2018/06/13/central-bank-carnival-powell-fed-goes-warpath/

    Central banks are on the warpath. The flow of monetary stimulus to the international financial system is drying up.

    The US Federal Reserve has given an unequivocal warning today that it will not be deflected by currency mayhem in emerging markets. Chairman Jay Powell might as well have told half the world to drop dead.

    The combined policy of the Fed, the European Central Bank, the Bank of Japan, and the Bank of England (G4 bloc) will be contractionary within months, perhaps dangerously so if the monetarists are right.

    China is shifting briskly in the other direction to avert an investment bust and a corporate default scare. But monetary easing by Beijing stores up a different kind of problem… read more via hyperlink above …

    • Ahem… the US Fed is administered by quasi monetarists. I think its wise to understand what foundations neoclassical and neo-new Keynesian operate under.

      • Cyclone Ranger

        Historically, actors of all camps find it difficult if not impossible to operate under foundations.

        Unless for example they’re trench warfare experts. Just sayin’.

      • CR

        As Sweeper and myself have noted – Grisham’s law and not to forget, Upton’s quote. That still leaves the quire about how institutions of learning are influenced via funding and establishment of foundations and ultimately the journals that use pay to play for white papers. But then again ‘Science Mart’ does a nice unpacking too.

      • Cyclone Ranger

        Blah, blah, blah. I understand you don’t read anything you reply to… but to realise you don’t read your own comments either is priceless.

      • Well when some comment and its just some gross un-evidenced based generalization, which actually does nothing to inform or otherwise, you might feel that way RS. I pointed out that the AEP article starts from a false premise and then extenuates an Ideological based theory from it. Neoclassical and neo-new Keynsians – are – quasi monetarists i.e. IS-LM + “Taylor rule bolt on” not to mention rational agent models. But hay, fear not the new classicals are here with microfoundations although internal consistency will never be a drama…. right?

        You may have missed all this back in the day here RS.

      • Cyclone Ranger

        I think its wise to understand what *foundations* neoclassical and neo-new Keynesian operate *under*.

        (my emphasis)

        And if you’d still rather post copy and paste gibberish from ‘algo sentences designed to impress the masses’ than get the point when it’s laid out so that even a first year economics student could follow it, then there’s seriously nothing more I can do for you. Have a nice life.

        Edit: well, actually, if you fwd your address through MB I’ll be happy​ to post you out a pair of wrap-around sunnies and a cane.

      • I still find your attachment to any – stuff – that is not relative to the point distracting from it. BTW what do you mean about economic [tm] students, most is just mainstream, you know the stuff that got us here in the first place and based on ideological axioms at onset.

        Old man and cane jibs eh, come and work with me for a week CR, see how you go. BTW stuff like that says more about you than it does me, not to mention there is a methodology of detecting certain preferences via dialectal style, its an environmental thingy.

    • Highlights the issues around the sub contracting system that builders and developers have used for yonks.

      “One sub-contractor told the ABC they had not had an invoice paid by Metro since January.

      Mr Bryant said this situation showed that there needed to be tighter industry enforcement of rules around when companies should pay invoices lodged by sub-contractors.

      On Thursday, the sub-contractor’s union warned that it was dealing with the liquidation of a building company at least once a month.”

      In this system the subbies are the small businesses without much bargaining power WRT builders or suppliers. Watched it all go down over a few decades, loss of skills, diminished build and material quality, job flow and organization crapification, all herald in as new innovative and smart >insert Bernays lingo< thingy. Basically sales and Marketing MBAs inverted the construction mgr relationship.

      Sorta like over a decade ago before taking time off to do the stay at home dad thing so wife could have ago I had an experience. Was sole person on new build over at the Gap and some 20ish year old kid walked in with shinny shoes, white polo oxford and slacks. I asked him what I could do for him, he said he was the new site supervisor. I dead set started laughing and then said you guys keep getting younger every few months. Without blinking an eye he regurgitated the pull string sales mumbo jumbo someone injected into his head….. YES – !!!!!! were bringing a "new" youthful energy [tm] to the market place.

      This kid would have been a journeyman for a couple of years, maybe. He then informed me he was running around 10 sites at a time. Wheeeeeee~~~~~

    • Relaxing, mini crisis, moderation, easing, spooning, (OK the last one is really Reusa’s sideways)
      The invention with words to mitigate fear. Recession replaced the more awful Depression.

      • Would be contained in Australia, Dales said. However I think it would hit NZ given the linkages and they already have their own problems with high debt

      • A gully is the classic.

        But a spooning! I love it. It’s like a comfortable relaxing… until suddenly you wake up to the realisation you’re being f#cked.

  2. Cyclone Ranger

    I’m seriously considering announcing everytime I enter a trade as some kind of public service – so that everyone else can make money of the other side of it for at least two weeks after.

    Not anecdotal, actuals. 16 out of every 17 immediately go south. Yesterday’s ETF punt was no exception. At least futures are finally showing some sign of potential recovery.

    • “She is among the minority of young buyers who have managed to break into the property market without getting a cash sum from family for a deposit.”

      but

      “Samantha is also fortunate to live at home rent-free and thankful that she was able to run boot camps for her father’s personal training business from a young age, as she made well above the minimum wage other high school students relied on.”

      That said, good on them for getting paid to provide a non-service to morons. Now it’s time to get fucked over in turn by buying a one-bed defective dogbox at the edge of the city.

    • Such a cliche..

      When not working full-time at Fitness First Cronulla or with her father’s personal training business, she is waiting tables at a restaurant.

      “I’ve always been brought up by my parents knowing that if you want something you have to work for it,” she said.

  3. Gyms and tables must pay well down that way – “Samantha hopes to have an additional $100,000 saved by the settlement date for her off-the-plan apartment, which will be in the next 12 to 18 months.”