Free falling banks drag ASX to new correction low

See the latest Australian dollar analysis here:

Macro Afternoon

The AUD is still firmly bid this morning:

The RBA-inspired mis-pricing of Aussie bonds rolls on:

But XJO has sunk to what will be a new correction low if sustained into the close:

Big Iron is soft:

Big Gas hammered:

Big Gold is firm:

Big Banks are still free falling:

Big Retail is on the verge of joining them:

As Big Realty keeps falling:

The RBA may see a property bust with no consequences but, increasingly, equities don’t.

David Llewellyn-Smith
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  1. So shares, house prices and business conditions collapsing and AUD rockets. Wow, now that’s a contrarian trade!

    • No its a USD trade. Market has been pricing relative weakness in AU for some time. Now US is also starting to show a few warning signs that it may not be as strong as was thought, Still looks a corrective move to me though for now.

    • It’s not a popular way to think of things but sometimes there simply isn’t a fundamental reason for the move. Currencies tend to be quite technical. If they become oversold they inevitable enjoy a bounce (for a period) and if overbought they will sell off. The key is the underlying trend.

  2. XJO was also at this price in 2015. 4 years of sideways movement. Not to mention back around 2007-2008 as well, so more than a lost decade really.

    One of my mates quietly told me his super had declined $15000 in two days recently. His overall losses over the last two months or so must be something like $80000 or more. He’s my age and his wife is urging him to try for a 4 day week as he heads closer to retirement. Looks like retirement will be delayed a bit, if this keeps up.

    All those poor bastards with their super in the ridiculous “balanced” options with 60% or more exposure to equities must be getting beaten like rented mules.

    • Tell you r mate
      Skippy says its only money and it has no value.
      Tell him also WW says
      he aint seen nothing yet

    • Probably the more relevant chart to super balances is the accumulation index which takes account of dividends reinvested. Wouldn’t want to be in some sort of high growth/low income option though.

    • Tassie TomMEMBER

      ” … the ridiculous “balanced” options with 60% or more exposure to equities …”

      Abso-bloody-lutely! And it’s especially ridiculous if you’re within 10 years of hoping to retire.

      • TT
        the retirement age will be 75 in maybe 1.5 electoral cycles.
        plenty of punters who have spent all their life in an office will easily struggle on till then.

      • Tassie TomMEMBER

        WW – True, but it doesn’t change the fact that the default “balanced” option is absolutely inappropriate for the vast majority of us, especially people looking to retire in the next 10 years.

    • Yup, all those inflated management fees so some over-rated dweeb can invest the money according to a faulty investment formula. Just one of a multitude of financial tragedies that will ooze to the surface in the coming years.