Macro Afternoon

Outside Australia, it’s been a good day for stock markets across the region with currency markets relatively quiet leading up to an important speech by Fed Chair Powell tonight, which is likely to involve some twitter dribbling in response from Trump.

The Shanghai Composite is up 0.7% to 2592 points going into the close, perhaps finally making some traction to get back above key support at the 2600 point level.  The Hang Seng Index is up further, around 0.9% to 26559 points, still building above the previous support level at 26000 points as the the daily chart is starting to stabilize:

US and Eurostoxx futures are up with the four hourly S&P 500 futures chart showing a continued breakout above trailing ATR resistance at 2675 points or so, but there’s really no sunshine until the 2700 or higher level is breached for confidence to spill back in:

Japanese stocks have put in another solid day, again helped by a much weaker Yen, as the Nikkei 225 closed nearly 1% higher to 22191 points.  The USDJPY pair continues its upward recovery after a mild pause overnight, now barreling in on the 114 handle to in a very overbought trajectory:

The ASX200 was the only loser in the region, basically treading water to close at 5725 points, still above the previous 5700 point support area, so it’s not all bad news. The Aussie dollar has blipped higher after a solid retracement overnight with a surge back up to the 72.30 level, but this is looking weak going into the City open:

The economic calendar has several important releases to watch tonight, namely 3Q GDP for the US., the advanced goods trade balance plus the weekly DOE oil inventory report and a speech by Fed Chair Powell.

Comments

  1. Not for long at the G 20 XI won’t look like a pander bear anymore when Trumps finished with him more like a raccoon 2 black eyes and bloody spot on the seat of his pants from a good rogering Rooster that biarch Trumpnator the little Girlyman

    • truthisfashionable

      That reads as though they are conflating the business charge out rates with personal earnings.

      As much as a sparky would love to pocket the whole $83 per hour, they have rather large expenses they need to take out of that ‘labour rate’.

      • Which is true. Although electricians have a high responsibility and accountability on the job so I think the pay is justified. Do something wrong and your financial future is over not to mention you can go to jail too. Can the same be said about bank and insurance CEOs? Look at their pay, no accountability either. Regarding the other trades ppl complain about the wages but no one wants to get their hands dirty.

      • Depends on the circumstance of employment per se sector and employer. For myself I get $40 flat rate as a part time [really full time], but do some Sats or weekend [sometimes multiple] side jobs with good profit margins for people that want smick work and will pay for it. And yes its all on the books because I want the cash flow and earnings documented, doing cashies is ones own worst enemy in the long run.

        I have an offer from an old mate that worked under my supervision yonks ago that got his certs for construction management – supervision, whilst working for some big mobs [wiley – hutchies] and now his builders. Going to run my side of things for him after the new year as a subsid under umbrella of the pty ltd.

        The McCrazzypants part is there is a huge demand for skilled ethical trades people and people will pay for it, the short term greedy eat themselves in the long run.

  2. CHINA: 40 years of reform and opening up …

    The Chinese dream is rooted in the very American notion of owning a roof over every head … South China Morning Post

    https://www.scmp.com/business/article/2174886/american-dream-home-ownership-quickly-swept-through-china-was-it-too-much?utm_medium=email&utm_source=mailchimp&utm_campaign=enlz-property&utm_content=20181128&MCUID=2da18b5305&MCCampaignID=a93b0427b6&MCAccountID=3775521f5f542047246d9c827&tc=3

    • Home ownership is China’s ultimate symbol of success, the mark of adulthood, readiness for a family, and ownership of one’s financial destiny

    • Chinese citizens devote as much as 74 per cent of their savings toward housing, compared with 35 per cent in the US, according to research

    Two decades ago, a scholar returned to China with a gift from his studies in America – the dream that an ordinary Chinese family can own a home.

    It was the quintessential American dream. But, in the hands of Meng Xiaosu, who would go on to be known as China’s “Godfather of Real Estate,” it would quickly become the quintessential Chinese dream.

    “A friend of mine in the United States told me about their dream – one home, one car,” Meng recalled in an interview with the South China Morning Post. “I believed that owning a car was out of reach at the time in China. But China could have the same home ownership dream.”

    That was quite an aspiration for the time. The wounds of China’s Cultural Revolution (1966-1976) were still raw, the communist nation’s dalliance with capitalism since 1978 was still in its teens, and the very idea of property ownership was not even protected by law. … read more via hyperlink above …

  3. Trigger warning!

    BIS
    Money
    Debt
    Cato
    Bannon….just kidding.

    https://www.bis.org/speeches/sp181115.pdf

    Keynote speech by Claudio Borio

    Few issues in economics have generated such heated debates as the nature of money and its role in the economy. What is money? How is it related to debt? How does it influence economic activity? The recent mainstream economic literature is an unfortunate exception. Bar a few who have sailed into these waters, money has been allowed to sink by the macroeconomics profession. And with little or no regrets.

    Today, I would like to raise it from the seabed. To do so, I will look to an older intellectual tradition in which I grew up. I would thus like to revisit the basics of monetary economics and draw lessons that concern the relationship between money, debt, trust and central banking.

    I approach the topic with some trepidation. So much has been written by scholars much better equipped than me, including a number in the audience. Still, I hope to shed some new light on some old questions. A number of the points I will be making are well known and generally accepted; others more speculative and controversial.

    My focus will be the on the monetary system, defined technically as money plus the transfer mechanisms to execute payments.2 Logically, it makes little sense to talk about one without the other. But payments have too often been taken for granted in the academic literature, old and new. In the process, we have lost some valuable insights.

    Let me highlight three takeaways.

    Not a peep about citizens and non-banks being permitted to operate deposit accounts at the publicly owned Central Banks but then that is a wild and wacky democratic idea and that has little appeal to your average Central Banker.

    https://theglass-pyramid.com/2018/09/09/100-safety-for-your-savings-the-rba-will-not-allow-it/

    • MediocritasMEMBER

      The obfuscation and apparent ignorance of how the monetary system functions is by design. Our current monetary system started as an organised crime ring, intended to fleece the sheep. It became so successful that it moved above the law. Economists are used, quite deliberately, to hide the truth of the thing and keep it going when, in fact, control of money creation should be returned to democratic oversight (a government power, checked by the electorate).

      The situation compares readily to a religion that utilises clergy to maintain the BS and shield the inner powers from scrutiny, allowing the manipulation of the sheep to continue unchecked. Mainstream economists are modern clergy; a bunch of charletons who often even believe their own BS. When an economist from the wild starts making too much noise about how the monetary system actually works, they are treated as a heretic and excommunicated.

      • “Our current monetary system started as an organised crime ring”

        Care to provide anything to substantiate that broad sweeping assertion.

  4. For those who missed this yesterday:

    Another excellent Mark Blyth: https://www.youtube.com/watch?v=ikOABrTRCFY

    Holy crap! Didn’t know about the evangelical rising political power… Would this explain Forked Tongues Scomo?

    PS: Skip, yeah – it was somewhere in the back of my mind – now that you mention it – but under a pile of uh… something.

  5. TailorTrashMEMBER

    Heard on the news tonight that ANZ has just brought in a rule that will limit the punters
    to “not more than 85% of their credit card limit to be used for gambling “
    That little bit of social conscience should be well received by a few mothers wondering
    how they might feed the kids on the other 15%. Can’t believe ANZ could announce
    that with a straight face .

    • Somehow I doubt that he will quit the Liberal party and sit in parliament as an independent prior to the election. For one, he said on ABC radio just this morning that if someone is elected as a Liberal candidate then they should see out their current term as a Liberal MP. Is not as if pollies ever go back on their word or anything … The second point is that the poodle and arnie have decided that federal parliament will only sit 16 days before the election so he will have very little opportunity to physically sit on the cross-bench so why bother.

      • Point one: it’s possible he didn’t mean what he said on the radio, or was lying. Note this guy is a politician.

        Point two: this whole thing seems premised on the idea he can defeat a Liberal party endorsed candidate as an independent. Actually sitting not important or relevant.

    • Excellent. I hope the floater sits on the cross bench, he’ll fade into insignificance just like Bernardi. What a wasted vote.

    • Need a royal commission into this shyte.. another captured regulator. Sitting on their hands. It’s only the single largest source of money laundering in the country, but if I fail to make an installment payment each quarter on my tax bill they slug me with interest easily. Stroke of a pen.

      • The Traveling Wilbur

        ouch. please type more quietly. head hurts. thank you.

        And yes, surprisingly full, fruity and nicely sweet. A bargin, even @ the $25 ish I had to pay at a BWS. But it was the Reserve. Did I screw up?

        If I did btw, I certainly don’t mind and can recommend doing so again. Will be going back for the 2016 hiding shyly behind its younger siblings next week in fact.

        In the meantime. Coffee.