Macro Afternoon

Not a good start to the New Year here in Asia today, with stocks down across the region, and the Australian dollar falling as a proxy as an unexpected slate of data from China, coupled with unease over the US trade talks – let alone the stupid Trump (but I repeat myself) shutdown – adding to the volatility.

The Shanghai Composite is down over 1.2% going into the close, currently at 2462 points as the selloff gains momentum.  The Hang Seng Index gapped 2% lower on the open and has closed 2.7% lower to 25153 points. This keeps it well under previous support at 25600 and creates a solid downtrend line with a retest to the previous lows at 24500 likely:

US and Eurostoxx futures are down going into the London open, with no evidence of buyers around as the year rolls on. The four hourly S&P 500 futures chart shows a flipping of momentum and the inability to hold onto the 2500 level:

Japanese stocks had the day off thankfully due to an extended NY holiday as the USDJPY pair slumped after cracking the 110 handle over Xmas, its now in the low 109’s ready to accelerate. This has been repeated on the crosses – AUD especially – showing a lot of safe haven buying:

The ASX200 started off well enough, relatively speaking, off by only 0.5% to start the day before a lunch time recovery was nixed by the Hang Seng open, selling off throughout the afternoon to close 1.6% lower to 5557 points. The Aussie dollar diced with its own terminal levels at the 70 handle, almost breaking before a late recovery saw it settle at the 70.20 to 70.30 zone going into the London open:

The economic calendar is relatively quiet tonight with some final PMI prints in Europe but not much else.

Comments

  1. The Traveling Wilbur

    And it’s not the can collecting that Stagmal finds soda pressing, it’s that it means he’s continually down in the dumps.

    Thank you, thank you. Please, take my Mrs.

  2. MB gets a mention.

    https://www.news.com.au/lifestyle/real-life/sydney-is-over-from-glittering-world-city-to-sad-and-chaotic-wasteland-what-went-wrong/news-story/c517ede8701bedb4119d2caf173e7907

    Although I’m not sure he got his point across…..

    Given the current state of chaos, planning expert Dr Shane Geha said overseas migration is the thing that will save Sydney — not cripple it.

    “I understand there’s some strong rhetoric about cutting immigration and slowing population growth, but it’s just wrong,” Dr Geha said.

    “Our future depends on immigration. Strong population growth and significantly higher density living is the solution to our problems and any contrary suggestion is just nonsense.”

    Paging Clive….

    • TailorTrashMEMBER

      Looks like the owners have also hired their own engineers to do an assessment …..well good on them for not trusting the shonky developers ,builders and certifiers
      ……..but most of all the NSW government that is frantic to bury this ……….perhaps to add spice we could get some Beijing engineers involved …..skills shortage and all that ………just make sure they are not graduates of Sydney University …….pathetic Straya ….pathetic …..

    • “As a precautionary measure, propping is being installed to support Level 4, and this will be completed by Icon Co (builder) by the end of today,” it said, according to The Telegraph.

      “The building is structurally sound overall.”

      If you believe that…. I’ve got an Italian bridge to sell!

      Floor 10 first, then a kitchen on the 32nd that has sagged, now floor 4. How long till they find cracks in the footings in the basement? If this joint doesn’t get declared as uninhabitable i’ll give up all hope.

      • Amusing after the director insisted repeatedly that the issue was “isolated”. Perhaps he was referring to the developers assets?

        In the absence of further news enjoy a review from Google:

        “Sure these apartments are pricey but you get what you pay for. I saved for 2 decades, enslaved myself to which bank, and sacrificed my second son to Olaf the Troll God, and I was finally able to buy this dream home. I moved in and you could immediately tell this wasn’t your average shoebox. Sure it didn’t have the same amount of space, structural rigidity or even ability to live in overnight, but it is WAY more stylish. Like plastic skygarden stylish.

        Sometimes my kids complain though. They say things like “Are we going to eat tonight”, “I’m tired of sleeping in the street” and “When will Jason come back” but then I just show them my awesome brochure and they shut their whiney mouthholes. A++++++”

      • TailorTrashMEMBER

        I saw that the other day …and thought no can’t be …a fourth floor in a building sold to China …never …but maybe the cracks in floor four will further reinforce that old belief ……..wouldn’t want to be selling apartment number 4 on the fourth floor of any glittering Sydney tower at the mo………perhaps we could find some innocent Australian kids to offer an incentive to so they can get on the ladder….. (that only reaches the fourth floor…….and the servants quarters)……..Garn Straya !

  3. The Traveling Wilbur

    I really don’t know why Vegans get such a bum-rap. I find them to be nice, well-tempered, people generally – I mean I don’t recall having a genuine beef with any of them.

  4. Poo got bid up late n the day, Poms seem to be giving it a flush. Go little poo! Down the drain!

    • From the bottom of that article..

      L.U. Simon also built Melbourne’s Lacrosse building on La Trobe Street. In 2015, fire raced up 13 storeys of the Lacrosse building in under 10 minutes in part due to the cladding installed on the tower. No one was killed. The company agreed to replace the cladding for $5.6 million, four years after the fire.

      This is the first I have heard they are going to replace that cladding? I thought it was an ongoing court circus with everyone playing hot potato with responsibility?

    • It is suspected glass balustrades shatter when there is excessive nickel sulphide present in the glass and it is exposed to heat, wind or other stresses. Too much nickel sulphide is often found in glass purchased cheaply from overseas, which has not gone through the processes required to meet Australian standards.

      >> Just another example of a country that doesn’t give 2 hoots about quality that has likely supplied this glass. Typical…

      • You rang …

        My point is no one around here seems to have looked at the American data during their entire RE debacle up and down and back up again, but shorters only know or seek to “provide liquidity” …. and consider themselves economic savvy …..

        Provide liquidity – who comes up with this jargon – ???? – oh yeah …. free market homo economicus neoliberal sorts …

        JULY– Old KGB files surface showing that Ayn Rand, Friedrich Hayek and Milton Freeman were actually committed communist agents pushing their ideas as part of a plot to destroy the west. Margaret Thatcher and Ronald Reagan now seen to be as ‘useful idiots’ for pushing these ideas further.

        https://www.nakedcapitalism.com/2019/01/2019-headlines-advance.html

        Personal attacks … lmmao … was any property damaged … chortle …

    • While Mr Lawless expected further price falls across Sydney and Melbourne in 2019, he anticipated they would stabilise.

      “Absolutely we will continue to see values falling … but it will be surprising if we see an acceleration of decline [in 2019],” he said.

      Haha.. I bet he will be wrong wrong wrong..

  5. Denmark’s government is to propose measures to avoid its financial regulator being too close to the banks it supervises after concerns of regulatory capture in its response to the giant €200bn money laundering scandal at Danske Bank.

    Danske’s money laundering scandal has led to the ousting of its chief executive and chairman as well as criminal investigations in the US, Denmark and Estonia after the bank conceded €200bn of money from Russia and other ex-Soviet states flowed through its tiny Estonian branch in a nine-year period.

    https://www.ft.com/content/ee686644-0527-11e9-99df-6183d3002ee1

  6. Mystic MedusaMEMBER

    Tomorrow’s (print) Australian Newspaper front page headline “Open Loan Books, Banks Told”.

  7. Is it possible that banks are now thinking about their own survival more than anything else. They are not going to give out bad loans if they put their very existence into question. Lower profits, lower share prices for a while might be better than going belly up.

    • C.M.BurnsMEMBER

      This is 100% the case inside one of the big four. I’d expect it’s the same for them all.