Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

The carnage from Wall Street overnight has not been exactly translated into the same falls here in Asia, but it’s certainly sent volatility higher as the fallout from the US/China “trade deal that’s not a deal”.

The Shanghai Composite is down 0.5% to 2651 points, still remaining above the previous support level at 2600 points, digesting the volatility quite well.  The Hang Seng Index has retreated a lot further however, down 1.6% to 26800 points, barely hanging on above the  previous support level and ATR trailing resistance at 26700 points:

US and Eurostoxx futures are steady going into the London open, but the four hourly S&P 500 futures chart shows a market poised to fall even further tonight if psychological support at 2700 points is taken out:

Japanese stocks have fared relatively well given the surge in Yen overnight, with the Nikkei 225 closing only 0.5% to 21919 points, recovering as Yen sold off slightly during the session.  The USDJPY pair has bounced off the previous session lows to pip just above the 113 handle, but this looks tenuous at best with daylight below:

The ASX200 continues to retreat on the risk off mood, closing 0.7% lower to 5668 points, unable to hold on to the tentative 5700 point support area. The Aussie dollar has slumped completely as well as the GDP print undershot today, falling straight through the 73 handle and back below the last two week’s resistance level at 73.30:

The economic calendar has two major releases to watch tonight, first the Canadian central bank meeting, then the US non-manufacturing ISM print.

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  1. The Traveling Wilbur

    So… Frydenburg reckons we’re saving less because we’re confident about about economic conditions and are spending *moar*. During a house-price slump.

    Jebus. Peak stupid is in. It’s official. He clearly is thinking about opposition, not a next term in Government.

    • To the LNP they’re mum and dad investors, providing a future for themselves and a place to live for renters. To us they’re slum lords.

  2. Seems my link to Trumps appointee set to take over consumer agency CFPB director is not to some peoples liking … oh well …

  3. TailorTrashMEMBER

    As things unfold in Straya somehow this quote from Harald McMillan seems to resonate …….

    “When I ventured to criticise, the other day, this system I was, I am afraid, misunderstood. As a Conservative, I am naturally in favour of returning into private ownership and private management all those means of production and distribution which are now controlled by state capitalism. I am sure they will be more efficient. What I ventured to question was the using of these huge sums as if they were income.

    I know now, I have learnt now from the letters that I have received, that I am quite out of date. Modern economists have decided there is no difference between capital and income. I am not so sure. In my younger days, I and perhaps others of your Lordships had friends, good friends, very good fellows indeed too, who failed to make this distinction. For a few years everything went on very well, and then at last the crash came, and they were forced to retire out to some dingy lodging-house in Boulogne, or if the estate were larger and the trustees more generous, to a decent accommodation at Baden-Baden.”

    When capital stops being income …where in Straya is chap to retire to ?

    • I think its important to view ones life in totality and not just pick specific dates e.g. –

      As a One Nation Tory of the Disraelian tradition, haunted by memories of the Great Depression, he believed in the post-war settlement and the necessity of a mixed economy, championing a Keynesian strategy of public investment to maintain demand and pursuing corporatist policies to develop the domestic market as the engine of growth. Benefiting from favourable international conditions,[2] he presided over an age of affluence, marked by low unemployment and high—if uneven—growth. In his Bedford speech of July 1957 he told the nation they had ‘never had it so good’,[3] but warned of the dangers of inflation, summing up the fragile prosperity of the 1950s.[4] The Conservatives were re-elected in 1959 with an increased majority.

      Now reconcile ….

      Opposition (1945–51)

      Macmillan indeed lost Stockton in the landslide Labour victory of 1945, but returned to Parliament in the November 1945 by-election in Bromley. In his diary Harold Nicolson noted the feelings of the Tory backbenchers: “They feel that Winston is too old and Anthony (Eden) too weak. They want Harold Macmillan to lead them.”[87]

      Although Macmillan played an important role in drafting the “Industrial Charter” (“Crossbencher” in the Sunday Express called it the second edition of The Middle Way) he now, as MP for a safe seat, adopted a somewhat more right-wing public persona, defending private enterprise and fiercely opposing the Labour government in the House of Commons.[88]

      And then some wonder about neoliberalism being just another form of corporatism which is enabled by public largess to kick things off and once fat and secure kick the public to the curb ….

    • The Traveling Wilbur

      These days most failed conservative (small c) politicians seem to end up in one Sky news and/or current affairs program or another.

      And then they get let go from even that minutely paid attention to stipend and fade into total obscurity. Or into one – nearly fell for the spam bot trap – nation.

      Though I’m not sure that’s what the distinguished gentleman had in mind by his question.

    • The Traveling Wilbur

      That said. I have given much intense and concentrated thought to retiring to a tropical island. Possibly Hawaii. But it would only be to get Lei’d.

    • He is describing our post Keating trade policy. Treat proceeds from sale of capital as income and buy imports. Some economists still don’t see the issue eg. MMT. Like a business with no revenue who sells its plant to pay staff.

      • MMT only states that the government spends first, can’t go broke in ones own debt, and is a description vs an ideological preference. I did supply a link to to all the T-bill mechanics.

        Selling off is just a factor of neoliberal privatization under the guise of efficiency, lower costs, and less government involvement.

      • I would add per a response post last weekend links which went unattended …

        The criticism that Keynes [1951(1926): 232-33] first launched against econometrics and inferential statistics already in the 1920s:

        “The atomic hypothesis which has worked so splendidly in Physics breaks down in Psychics. We are faced at every turn with the problems of Organic Unity, of Discreteness, of Discontinuity – the whole is not equal to the sum of the parts, comparisons of quantity fails us, small changes produce large effects, the assumptions of a uniform and homogeneous continuum are not satisfied. Thus the results of Mathematical Psychics turn out to be derivative, not fundamental, indexes, not measurements, first approximations at the best; and fallible indexes, dubious approximations at that, with much doubt added as to what, if anything, they are indexes or approximations of.”

        Umm … the beguiling of – The Bezel – maybe …. watch out for that first step its a long fall and proximity to those that take that leap … propensity to go drowning man syndrome is worrisome at best.

  4. Another Laborite is taken to the dark side – for Sam it was having a few bills paid, for this fool it appears to have been the classic honeypot.

    “Mr Vatskalis’s wife Amy Yu-Vatskalis lectures in Mandarin at [Charles Darwin University in the northern suburbs of Darwin], and was seconded to the university from Hanban, the Confucius Institute’s Chinese headquarters, in 2012.”

    On the other hand Associate Professor Feng Chongyi, of the University of Technology in Sydney is surprisingly forthright.