Macro Afternoon

A relatively upbeat start to the week here in Asia following what was a dour finish on Friday night on Wall Street. In China markets however are flat but elsewhere, weaker domestic currencies are supporting an eager start with the ASX200 the standout.

The Shanghai Composite is barely up after the lunch break, hanging on 2595 points still below the previous support level at 2600 points but navigating through the weekend gap problem well.  The Hang Seng Index is similarly unchanged, up a handful of points to 26112, matching the weak session from Friday as it travels sideway after a failed breakout from last week:

US and Eurostoxx futures are up about 0.3% going into the London open, with the daily S&P 500 futures chart showing how important it is for US markets to pick up this week as they start to broach bear market territory:

Japanese stocks have rebounded with the Nikkei 225 lifting 0.7% to recover a small margin of its big falls on Friday, currently at 21535 points bouncing off support at 21000 proper. The USDJPY pair gapped higher this morning but has settled down at the mid 113s as it tries again to get back to its previous two weekly high above 113.80 or so:

The ASX200 however has recovered all its Friday losses, up about 1% to 5658 points, bouncing off terminal support at 5600 points, as traders get nervous going into the long Christmas break. The Aussie dollar has been quiet all day, still below the 72 handle and looking very weak going into the FOMC meeting:

The economic calendar starts the week slowly with a few housing figures in the US plus the usual Treasury auctions.


    • truthisfashionable

      Now all those Brisbane people will have to stop saying “not falling where I am… It’s a Sydney and Melbourne problem”.

      Just Adelaide, Canberra and Hobart still positive… They will catch up

    • nice burbs they aint dropping the price…yet

      home to see a few high profile RE agents get hot for 6 in the property downturn about to hit in brissie

      • Are you going to auctions DB? In every other city the nice suburbs were the first to start falling – which makes sense given loan sizes are down and Chinese money is gone.

        Canberra top suburbs are definitely down even though the city wide median is up a bit.

      • arrow been to a few auctions…some got over the line i dont know how…seems to be still the line that ‘its cheap compared to sydney’….

        also some agents blatant with ads for chinese buyers…listing at 1.388 as an example

        the ironic thing is that if i would be rather better off if i just blindly bought bought bought like everyone else many years ago and literally not worried what things were going for

      • Don I find myself thinking the same, if I had bought a house instead of discovering MB several years ago would I be ahead? Hard to know. I’d have plenty of equity by now (likely more than the savings I actually have). But the house would be pretty crap (I didn’t have much deposit then) compared to the really nice rentals I’ve lived in. I also average 2 big holidays a year, maybe wouldn’t have done that with a house. And I might have been stressed.

        I figure if prices don’t fall, I’m worse off now in $$$ terms although well ahead on quality of life. If prices DO fall nicely I am probably well ahead in $$$ terms too.

    • The Traveling Wilbur

      Er. No.

      Brisbane is at least 10-15 years behind Sydney. And about 20 behind the developed world.

      • Wino ShinyfaceMEMBER

        It’s not a bad thing at all, in Sydney you no longer need to travel to the subcontinent in order to be stared at and pushed around by packs of under employed males

      • The Traveling Wilbur

        Dunno. Matter of personal taste probably. Depends​ if you like Batman & Robin. It’s still screening in selected theatres here.

      • The Traveling Wilbur

        @Wino. Your own fault if you want to hang out there. Besides, it’s non-sensical anyway. There’s way better places in Sydney to drink than Barangaroo.

        *winks @ KPMG*. WOS.

    • Don’t worry ARROW you haven’t missed buying
      You’ll buy much cheaper than what you missed out on sit tight until 2023/4
      You’ll be buying 30% less than a few years ago when you missed QE caused that last blow off bubble
      I’d nearly go as far as saying just rent for the next decade
      You don’t want to be in any debt at all

      • The Traveling Wilbur

        And if that turns out not to be the case? Gunna stump up his 2025 house deposit?

        PS my logic is this: things get that bad for that long (GFC+ bad) then no one is going to be able to afford anything, this blog will no longer exist and I’ll have no platforms with people saying “I told you’se” I’ll have to listen to. If that doesn’t happen, housing will have returned to boom times. Again. Just like for most of the last 10 years.

        Be a shame for someone to miss out on affordable housing due to this blog. Twice.

      • BCnich I tend to agree with you, main issue is I don’t have quite that long, I will need to buy a house within 12-18 months (because as Leith memorably says, paying too much for a house is still cheaper than a divorce!).

        If the economy is really in a full blown crisis – i mean armageddon – by then, I can probably convince the other half to hold on a bit longer. But it’s not entirely in my hands. I’m just enormously grateful price falls have genuinely started, or I’d have had to buy this Spring.

        TW – don’t be bloody silly, I have not missed out on affordable housing. To date I have been renting – which is entirely affordable and gets me decent housing. What I missed out on was massively overpriced, completely sh!t housing. Now I have saved enough that I also have the option of massively overpriced but quite nice housing. I’ll keep waiting, thanks.

      • The Traveling Wilbur

        Good to hear. Dunno when you started looking though, the first time, hence wording. Plus, tis not just your good self that applies to (unless you like using multiple handles like some others here).

        2002 was very affordable btw. Still nowhere like 1988 or 1956, but good nonetheless.

        I imagine 7 years after Xi disposes of the last of the oligarchs that things will be that affordable again in Australia.

        In the meantime, people might have to wrap their heads around current pricing being sustainable. The banks have cut lending capacity by, at most, 20% and there’s no shortage of new buyers who *want* a home, just a shortage of those who can afford one at current prices. But they don’t have to drop much further before every one of them can. Prisoner’s dilemma, I believe​.

        Quite appropriate when you think about it.

      • TTW – first started looking in 2011 (didn’t quite have the deposit then, but started looking. Found MB instead).

        Canberra since then has risen, but nowhere near as much as Sydney, so I don’t feel too much regret at not buying back then. I would however feel a f#cking sh!tload of regret if I buy just below the top now and it crashes properly just after that.

    • I used to be a financial advisor but sold my business at the start of 18
      The guys who know, some of my mates always say can you tell my wife
      It’s always the wife that’s relentless
      I’m divorced now, have a GF and she gets it
      We prefer to travel
      Our 2 best friends have moved too Brisbane and maybe Brisbane ok but I still think to hold for a few years in mel and Syd I don’t know brissie as much but I’d like to spend more time on GC, we love main beach

    • Can’t wait for Adelaide to go negative, then it will be a nation of housing values going down in unisyn. A beautiful site to behold.

    • Found the comments on the apartment settlement mentality of OS off the plan buyers fascinating. Why would you take out a bridging loan on rates of up to 20-25% when you could walk away from the 10% which has already been wiped out and bail back overseas? Doubt you would be extradited.
      Are they that worried that something bad will happen to them if they go back? Loss of face etc., borrowed money from family and friends?

      In an earlier post by M North they had a guest that described a set of marginal buyers that were advised to fund their studies in Australia by buying property and relying on the capital gains to cover the cost of tuition. That sales pitch does not make sense anymore. Be interesting to see what happens by March 2019.

  1. well done labor for raising the refugee intake to 32000 a year!!!!! NOT

    is he stoopid??? old labor members?? supporters???

    the labor party has deserted me….they have turned green and progressive

      • Survival of the Fittest remember … that was when they were somewhere else and bore the brunt of neoliberal corporations looting the joint.

        Great Equity Mate Buffer and Portfolio Stuffer… now all we need is gated communities with private security and broken glass high walls with a statue of Milton in the center.

    • I wrote a letter of complaint about this to my local labor federal member. Got a bs generic response of everything is awesome blah blah blah. I haven’t voted for a major party federally in a while now and I sure won’t start now

    • Wino ShinyfaceMEMBER

      Shorten has a massive oestrogen problem similar to canada’s terdeau, he will be a disaster

  2. Whilst everyone is banging on about RE are a little thought for the day …

    If derivatives and futures clearing seize up, those parts of the economy that relies on derivatives which is a large fraction of the market in real, tangible, things will have the financial equivalent of a heart attack. Goods and Services will stop “circulating”.

    Carry on ….

    • Shouldn’t be too long now for the next bout………..with more than 50,000 ships and 10,000 planes on the go at any one time the sooner we are forced back on local resources the better. Roll on the next Carrington event for the sake of the environment.

    • So much for the “services economy”, eh?
      Kinda’ like when all you have to keep you warm is the aircon: turn it off and it gets cold real quick.

  3. Sydney and Melbourne home prices have tumbled 1.6% in a month | Business Insider

    • Sydney and Melbourne home prices have fallen 1.6% in a month.

    • That’s significantly faster than what was seen earlier this year, and may reflect vendors are lowering their price expectations in order to secure a sale.

    • Prices in Perth and Brisbane have also fallen over the past month, albeit by a smaller amount. Adelaide is the only Australian mainland state capital where prices rose over this period.

    • Property listings in Sydney and Melbourne have surged by more than 20% over the past 12 months. Listings have also increased in all other capitals except for Adelaide and Darwin. … read more via hyperlink above …

    • Not really seeing these purported falls in Perth where I am looking. In fact things seem to be selling quite quickly. Interstate infestors snapping up relative bargains? Dunno, but it’s feeling a bit like the boost we had end of 17.

  4. Hey wilbs

    Dunno if you have detected it, the CV CS has a tiny undercurrent of geranium/lilac after being let to breathe.

    Enormously complex under the big notes of dark berry.

    One slight downside is some residual egg fining which is only detectable after breathing for a while.