Macro Afternoon

See the latest Australian dollar analysis here:

Australian dollar smacked as China stoush explodes

With the steep falls on Wall Street overnight in reaction to a not-dovish-enough Fed, Asian markets have suffered a similar fate with Japanese stocks bearing the brunt of the carnage as the BOJ meeting also passes without any easing measures.

The Shanghai Composite is probably the best performer, only down 0.4% or more to 2538 points as the previous support level at 2600 points becomes a distant memory.  The Hang Seng Index is off more than twice that, down 1% to 25590. Today’s move takes out support at 25600 and the very tentative uptrend line, squashing this nascent recovery:

US and Eurostoxx futures are dpwn by at least 1% or so going into the London open, showing that this rout has more to go! The daily S&P 500 futures chart is looking well oversold now but so far there is no evidence of a slowdown or bounceback:

Japanese stocks had their worse day in sometime, with the Nikkei 225 slumping more than 3% to 20365 points taking it back to the September 2017 lows after failing at terminal support at 21000 proper. The USDJPY pair has reversed as well, falling straight to the 112 handle after domestic reaction to the FOMC rate rise and the BOJ’s lack of action. This makes a new weekly low and sets up a multi-month downtrend possibility:

The ASX200 didn’t escape the carnage, selling off immediately on the open, recovering some and the going into a dive towards the close, down 1.4% to 5505 points. The Aussie dollar has continued its falls after the big flop overnight, still below the 71 handle but extremely oversold and ripe for a bounceback:

The economic calendar continues with all eyes on the Bank of England tonight, followed by US initial jobless claims.

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  1. Steen Jakobsen….global policy panic is on its way. Even Straya gets a special mention. This is what we now have heading our way on a truly global scale. Nothing was ‘fixed’ in the last 10 years. The debt is still there and there is now even MOAR ! Who has the most ammunition ?

    2019 – The year of Déjà vu but this time on a much bigger scale ?

    Europe is sliding back into recession despite a negative European Central Bank policy rate and Germany and its marquee names suddenly look a far greater risk than Italy’s populist government. Australia is a mess, both politically and economically, as the Royal Commission leaves banks tightening lending standards in an economy that is at least 50% driven by housing.

  2. The Traveling Wilbur

    Santa better not show up at my place this Christmas. I’ve got more than a carrot waiting for him. And Rudolph.

    And he’s going to get sleighed once the New Year starts up too.

    I’m done long anything… so obviously expect a massive bounce in equities for next two weeks (tomorrow is almost a certainty now for the ASX).

    • “More than a carrot” – that could mean anything.

      But yeah it sounds like bad vibes are even catching up to the sophorific complacency of Straya…

      There ya go I just jinxed it! 😁

      • Gav I’m 90% out of equities and not short anything either, just sitting in USD short-term bonds and cash for a future house. So don’t really mind what the ASX does, hoping for your sake the FAANGS have one last rally!

      • Smart move Arrow 2

        Are you able to share what equities make up the 10% you still hold ??

        I sold some Aristocrat some time ago at $ 31.00 which covered the total cost of all the Aristocrat shares I now own.
        ( Paid $ 2.40 years ago for ALL )
        I try to buy very low then sell 20% to cover the rest; does not always work.

    • There is no way they will screw up the groundwater at all. All very professional and I’m sure they have the interests of the surrounding farmers and the reef first in their minds. Giving this very upstanding company free unlimited artesian water to wash their third rate coal will never impact anyone else.

    • TailorTrashMEMBER

      …..and all that China money in Vancouver might not look so safe after all ….if Trudeau has any balls ……doubtfull that .,,,,