Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

A strong finish to the week here in Asia with all markets lifting across the region as the Chinese trifecta of economic prints – fixed asset invenstment, industrial production and retail sales – came in pretty much as expected. The USD has fallen further against the majors, save Yen, with the Aussie dollar looking like finishing at a two week high.

The Shanghai Composite is steady going into the close, currently a few points higher at 2685 points. The Hang Seng Index is doing much better, up some 1% higher to 27280 points, after having found a temporary bottom here on the daily chart:

S&P futures however are building here despite Hurricane Florence with the Eurostoxx up by some 0.2% going into tonight’s session. The four hourly chart of the S&P500 shows the boost through short term resistance at the 2890 level as it attempts to close the week at the former high:

Japanese stocks continue their surge higher, with the Nikkei 225 closing up 1.2% to crack the closely watched 23000 points level, setting up for an interesting session next week. The USDJPY pair briefly got above the 112 level before a minor retracement and is sitting pretty here going into tonight’s trade, slightly overcooked so the retracement could extend to the 111.70 level:

The ASX200 was the slowest performer, still putting on runs but nothing impressive, closing 0.6% higher to finish the week out above what could have been resistance at 6150 points, up to 6165 points. The Aussie dollar is treading water here just below the 72 handle vs USD and is poised to make another leg higher, but probably not as far as the other undollars:

The economic calendar finishes the week with a bang – US retail sales for August, industrial production numbers and the closely watched University of Michigan sentiment survey.

Have a good weekend!

Latest posts by Chris Becker (see all)


    • I recall highways paved in Italy to a deadend as a result of mafia “make work for mates” and kickbacks.

    • Yeah, looks like Norway has been captured by the car lobby as well.

      U$47 billion for a 1100 km coastal highway with a speed limit of way less than 200 km/h?

      Far better to build a 600km/h high speed railway – after all, there is one from London to Paris but no road from London to Paris.

      • Yes! High speed rail for a country with population of 5M, so they will only run one train per week, if that? Patronage numbers don’t stack up.

        $47B is for the removal of seven ferry crossings, not for 1100km. The road is already there, and is in fair shape (Google-drove it).

    • Still fondly remember driving through a tunnel in Norway and my satnav instructions were “in 400m at the roundabout take the 2nd exit”. I was saying WTF, I think the satnav is fooked, but nope there was a roundabout in a tunnel under a fjord. Norway, winning!

  1. The bookies:

    Division of Wentworth By-Election

    Liberal $1.65
    Labor $3
    Independent $5
    Greens $24

    The woman Prime Minister Scott Morrison backed to replace Malcolm Turnbull in the blue ribbon seat of Wentworth was once a member of the Labor Party, raising fresh doubts over the Coalition’s candidate vetting regime ahead of the federal election.


      • Hugely safe Lib seat, plus the electorate knows a protest vote (usually a safe option at a byelection) could bring down the government. Odds on Lib win is right.

        Not saying a dark horse won’t come through though! As always best bet is long popcorn futures.

  2. Everything You Know About Neoliberalism Is Wrong

    “..Let’s face it: national sovereignty has become irrelevant in today’s increasingly complex and interdependent international economy.

    The deepening of economic globalisation has rendered individual states increasingly powerless vis-à-vis market forces. The internationalisation of finance and the growing importance of multinational corporations have eroded the ability of individual states to autonomously pursue social and economic policies – especially of the progressive kind – and to deliver prosperity for their peoples.

    Thus, our only hope of achieving any meaningful change is for countries to ‘pool’ their sovereignty together and transfer it to supranational institutions (such as the European Union) that are large and powerful enough to have their voices heard, thus regaining at the supranational level the sovereignty that has been lost at the national level.

    In other words, to preserve their ‘real’ sovereignty, states need to limit their formal sovereignty…,”

      • Yes it was a bit cheeky to leave out the start of the next paragraph

        “..If these arguments sound familiar (and persuasive), it is because we have been hearing them for decades. Progressives often stress how neoliberalism has involved (and involves) a ‘retreat’, ‘hollowing out’ or ‘withering away’ of the state, which in turn has fuelled the notion that today the state has been ‘overpowered’ by the market…”

        “..This, however, does not fit the empirical record of the past decades…”

        Having said that, the article is an interesting read because it makes the point that just as there are left and right wingers pushing for globalism and the decline of the nation state, there is a solid left wing case to oppose the globalist project.

        If you listen to then resident ‘tankies’ on MB you would think that only extreme right wing libertarians could have any objection to a globalised order.

    • That argument is rubbish. Something Keating would say.
      “Globalisation” is something the “left” liberal commentariat like to roll out in order to skip over anything which matters so as to focus on the republic.
      In reality the effect of liberalising trade and capital has been to centralise markets into small and more manageable areas which has paradoxically empowered certain States. For example the US Treasury has arguably never been as powerful as it is today – see their global policy rolled out against money laundering, or Fed holding the entire global financial system on life support through swap lines. The G7 could shut down the FX market with a phone call. The “left” liberal commentariat will say in a hyper serious tone, but but globalisation!! changes everything! Correct it increases the potency of the State to roll out Social Democracy should it want to. But it doesn’t want to because your team took over the State 4 decades ago.

      • Here comes the tankie.

        “..Correct it increases the potency of the State to roll out Social Democracy should it want to. But it doesn’t want to because your team took over the State 4 decades ago…”

        Who took over the state?

        What small government libertarians?. Anarcho-leftists who reject the state?

        You goose.

        No one took over the state.

        It is just the same Sweeper/Skippy mentality in a new mutated form that was better at winning elections.

        That is the problem with you tankies.

        Always sulking about another group of control freaks in charge and pining for the days when central command was run differently.

        If you want to be running the place again why not try some policies that people will vote for.

        Oh that’s right, you dont like policies that the public would vote for do you?

      • A coup!

        Is that what you call the defeat of Chifley in 1949 and every Federal Election until Whitlam?

        A series of coups?

        And what about 1977?

        I suppose you argue the ALP split was a coup as well.

        If you want nationalise everything go for it but stop complaining when thoss that do offer those policies get a handful of votes.

      • A. The coup was not of a political nature – see Washington Consensus or Third Way e.g. both parties subscribe to the same mainstream economic group think. It is in only the recent past that any outside political agency has questioned its supremacy – Sanders – Corbin. None of this was achieved through the voting process as once in the party leaders would automatically revert to mean – see Obama.

        All you get with change in administration is social management and cultural window dressing.

        No broad sweeping privatization has been suggested pft, not that the opposite has happen over the decades. Not all social goods or services function better as a for profit or private concern in delivering concrete social benefits.

      • Skippy,

        So it wasnt a coup?

        Paging Sweeper for clarification.

        What was it Skippy?.

        Oh that’s right a brainwashing of the entire population to vote against their interests.

        A simpler solution is that the population just lost interest in the policies of state nationalisation.

        That they got policies of corporatisation – private nationalisation – and are not happy with those should suggest to you that both alternatives are not a solution.

  3. NEW ZEALAND: Wellington to get new inner city apartments – but still short of homes | RNZ News

    Posted at … (comprehensive)

    Wellington to get new inner city apartments – but still short of homes | RNZ News

    … concluding …

    … Co-author of the Demographia International Housing Affordability Surveys, Hugh Pavletich, said initiatives from the council need to be happening elsewhere.

    “What we ideally need to see is the council focusing on the fringes of Wellington and so that affordable housing is provided out there,” he said.

    He said the fringes act as inflation vents, which will then impact prices in the central city.

    “You can’t have unaffordable housing out on the fringes and affordable housing internally,” he said.

    … A simple structural definition …

    For metropolitan areas to rate as ‘affordable’ and ensure that housing bubbles are not triggered, housing prices should not exceed three times gross annual household earnings. To allow this to occur, new starter housing of an acceptable quality to the purchasers, with associated commercial and industrial development, must be allowed to be provided on the urban fringes at 2.5 times the gross annual median household income of that urban market (refer Demographia Survey Schedules for guidance).

    The critically important Development Ratios for this new fringe starter housing, should be 17 – 23% serviced lot / section cost – to balance the actual housing construction.

    Ideally through a normal building cycle, the Median Multiple should move from a Floor Multiple of 2.3, through a Swing Multiple of 2.5 to a Ceiling Multiple of 2.7 – to ensure maximum stability and optimal medium and long term performance of the residential construction sector.


    1. Standard detached housing should not cost any more than 3.0 times annual household incomes of specific metros ( refer Annual Demographia Surveys ; recent Glaeser & Gyourko paper ; Recent Reserve Bank of Australia paper ).

    2. New fringe starter house and land packages should cost around 2.5 times … at development ratios of 20% serviced lot and the balance construction ( Definition of an affordable housing market http://www.PerformanceUrbanPlanning ).

    3. Apartment / townhouses should be around 2.0 times ( to illustrate refer Houston Association of Realtors Monthly Report ).

    4. Fringe manufactured house (prefab) and land packages should be around 1.5 times ( refer Leaky Homes And An Architect’s Musing’s | Scoop News March 2010 published Interest Co NZ as ‘Houston: We have a housing affordability problem’