Macro Afternoon

It’s been a very interesting day here in Asia with most action again centered on currency markets with the BOJ meeting, Australian unemployment and the NAB interest rate hike dominating. The Aussie dollar has been on a roller coaster, falling against almost ready after spiking following the unemployment print, with other currencies stable moving into the ECB meeting.

Chinese shares are rising despite any PBOC intervenation with the Shanghai Composite currently up 0.5% to 2594 points going into the close. The Hang Seng Index is also steady, up about 0.15% to 27045 points. The daily chart shows how important it is for the market to get back above the previous false break high above 27100 points:

US and Eurostoxx futures are up only very slightly going into the London open with the four hourly S&P 500 futures chart still indicating some support at the 2630 point level but I’m still waiting for the BTFD crowd to step in here:

Japanese stock markets are mixed again, with the TOPIX up about 0.3% while the Nikkei 225 is down about 0.25% to 20542 points. This was expected given the drop in the USDJPY pair last night, with some stability during the Asian session to remain at the 109.50, absorbing the BOJ meeting without much fuss:

The ASX200 has taken back its previous losses, and is up 0.3% going into the close at 5864 points, helped specifically by the flop in the Australian dollar. The NAB hike is behind this putting a lot of pressure on the RBA when it finally returns next month, sending the Pacific Peso right down to the 71 handle:

The economic calendar has a big one on the radar tonight – the monthly ECB meeting – plus a slew of preliminary European manufacturing PMIs.

Comments

  1. What’s going on with the spot electricity market in South Australia and Victoria this afternoon? The price has skyrocketed to the moon!!!! Big bucks made today by some.

      • Come on Bogan, miillions are tuning in all 37 TVs in their house to watch the resurgent Australian team taken on the Joondalup U13’s! That is worth fvcking the power grid for!

      • Mining BoganMEMBER

        At work this morning there was more talk about the WI v Eng match than about the Aussies. When I say more I mean Australia wasn’t mentioned at all. A test match morning and not one word. There was bagging of how long and noring the Big Bash is and bagging of Cricket Australia though.

        CA has managed to destroy people’s interest in the game. Good work. On the wireless today the funny men were talking about bringing back an Australia A team to play the current test team. You know, like back in the mid 90s when they tried it for one season but it got canned because Mark Taylor got grumpy that the lesser team had all of the crowd support.

  2. The Reason You’re Broke AF: All 5 Aussie Cities Ranked In World’s 20 Least Affordable Housing Markets … GQ Australia

    https://www.gq.com.au/success/finance/the-reason-youre-broke-af-all-5-aussie-cities-ranked-in-worlds-20-least-affordable-housing-markets/news-story/63b25f61aa0f41ef46323cf297dcb2fd

    HERE’S TO LIVING WITH PARENTS UNTIL WE’RE SENILE. … read more via hyperlink above …
    .
    .
    Demographia In The News

    https://www.google.co.nz/search?q=demographia&source=lnms&tbm=nws&sa=X&ved=0ahUKEwiUvIz01IPgAhWYTX0KHSBIDeoQ_AUIDigB&biw=946&bih=416&dpr=1.63

  3. First Home Buyers FOMO? Update:

    So four people from my cohort from high school (early 20s) just bought their first houses in Sydney recently I have noticed on FB…
    $815,000 – 4 bed house, Mount Annan – a good looking house with faux federation wide frontage and great kerb appeal
    $750,000 – 3 bedroom house, Quakers Hill – absolutely hideous house with no kerb appeal, much cheaper and better is available in the area, I have no idea what they were thinking.
    $690,000 3 bedroom house, Dean Park – run of the mill brown brick house, dodge area? Close to Mount Druitt….
    $700,000 2 bedroom unit, Abbotsford – red brick 3 storey walk up unit block, though walking distance to riverside.

    Just to reiterate, these are couples in their EARLY 20s. No idea the details on deposit but these are massive values for FIRST home buyers!!! Especially in a falling market, what were they thinking?! Plus the first 3 houses are over 40km from Sydney CBD for those outsiders.

    • They are the people that Josh is trying to scare witless and wants to protect by pressuring the RBA and APRA to stop being difficult and let the banks get back to doing what they do best. Blowing unproductive housing bubbles with their franchise to create privatized public money.

      With APRA already helping out it seems likely that the RBA will now sprinkle a bit of sugar about at the next Board Meeting.

      That might not be enough so expect a bit of sugar from the government too in the form of incentives to home buyers or relaxing the rules on foreign investment or increasing immigration on the QT.

      • C.M.BurnsMEMBER

        the laws on foreign investment are not enforced as it is and are not a constraint. The constraint on foreign – read Chinese – buyers is from the Chinese government. How will Bubbles and Scummo influence that ?

      • Not enforced? Says who?

        I think you may be confusing the limited operation of the laws with non enforcement.

        Laws are laws and lawyers for buyers will be advising them of those laws. If you know of some buyers who are breaking the laws do your duty citizen.

        The Chinese are not the only people interested in buying housing in Australia especially if the purchase comes with residency.

        There is still plenty of sugar in the sugar bowl even if there is a growing amount of fly doo doo in the mix.

      • Immigration is already as high as possible – or so I think. Maybe the fake Greens will ramp up the immigration rate to 400,000/year!

        You have a good point about citizenship. Instead of giving out citizenship for buying a “degree”, the LNP could give out citizenship for buying a house.

      • If the LNP does anything even close to “houses for citizenship” then they will forfeit pretty much every seat in QLD, WA and even country NSW and Victoria to One Nation and even independents. And they’ll never win an election ever again.
        As you can’t win a federal election if you’re running dead in 2 states and 1/3 of two others.

        That is beyond the nuclear option for the LNP.

      • “If you know of some buyers who are breaking the laws do your duty citizen.”
        People did repeatedly, and the FIRB completely ignored them. ATO seems to be doing about the same.

    • I’m looking to buy in those price ranges, but I am planning to have at least 80% deposit lol.. I am however mid 30’s. So have a head start on these folks.

      • “Head start” is a modest way to put it Gav!

        My deposit is about 1/3 the size of yours but the financial advisor still said to me “well not many FHBs have that… I don’t think you need me!”

      • No skip, it doesn’t. It’s horrible, the situation makes my blood boil over. I hate the fact that the elites have made home ownership out of reach for young people and deprived them of a fundamental part of becoming an adult and being able to raise kids in a safe secure environment.

      • I’m 42 and I can’t afford those…
        That’s what getting divorced and having to sell in 2008 does for you. I hope they’re in solid relationships!!

      • That’s my point Gav … RE is a millstone with out productivity inclusion, where mopes chase yield and leverage credit in lieu of when job longevity and quality has been circling the drain for decades … cough share holder value [tm] demanded it … the market speaks no lies …

      • Sorry I’ve got it all wrong Gav … all the people with money in tax havens can buy it all up on the cheap and be absentee lords, you know like all the American RE pumped for international investors post GFC. Even a few were pitching it here on MB back in the day …. people bought too much house and needed the curb to sort their moral wanting …

        America is so much better now …. wipes tear from eye ….

    • They aren’t thinking, their parents are pushing them into a meat grinder, and they’re chained together.

    • Interesting. What kind of jobs do these early 20s couples do? In current lending conditions, at these prices, they’d need a combined income of at least 150k. In addition to a deposit (at early 20s courtesy of mum and dad) of around $200k. The deposit is certain to be eroded by the falls in values over the next several years. And, most of their income will be servicing this mountain of debt for many years to come. Forget about any travel or having kids. They’ll just have their pile of bricks in a suburban Aussie wasteland. What a disaster. It’s almost sad.

  4. The first OneWeb satellite shipped from from Toulouse, France, to French Guiana.

    Those six satellites are scheduled to launch Feb. 19 on an Arianespace-operated Soyuz rocket.

    Arianespace is launching the roughly 150-kilogram satellites directly to their 1,200-kilometer operating orbit.

    https://spacenews.com/first-up-satcom-first-oneweb-satellites-shipped-for-launch-%E2%80%A2-laser-ground-stations-linked-to-facebook/

    SpaceX was meant to launch heaps of satellites for satellite internet.

      • Andrew LeesMEMBER

        For mid orbit satellites (~1200km) the latency added by the up and down link should be small (around 8ms if my quick mental calcs are correct), and if there are high speed links between satellites, the overall latency between some points may be less than cables. The latency issue was mostly caused by use of geostationary satellites at around 40,000km.

    • I had to have a look.

      Their Elite mentoring program runs at $50k.

      Looks like Tim Lawless is involved in the ‘venture’

  5. Russian interference in US = bad
    US interference in Venezuela (and the rest of freakin’ world) = good!!

    Just a law of nature

  6. @Cee …

    Per statement a few days ago about economists and money ….

    “The importance of money flows from it being a link between the present and the future.” – John Maynard Keynes

    But then again the Laffer [looter] curve refuted Keynes in totality ….

  7. interested party

    What are the odds for this bill getting through congress?

    H.R.204 – American Sovereignty Restoration Act of 2019……..basically a total pullout from the UN.
    https://www.congress.gov/bill/116th-congress/house-bill/204/text

    SEC. 2. Repeal of United Nations Participation Act of 1945.

    (a) Repeal.—The United Nations Participation Act of 1945 (Public Law 79–264; 22 U.S.C. 287 et seq.) is repealed.

    (b) Termination of membership in United Nations.—The President shall terminate all membership by the United States in the United Nations, and in any organ, specialized agency, commission, or other formally affiliated body of the United Nations.

    (c) Closure of United States Mission to United Nations.—The United States Mission to the United Nations is closed. Any remaining functions of such office shall not be carried out.

    • I can remember back in the day when America did not pay its U.N. dues based on the argument that it was not getting its moneys worth ….

  8. Went to a summer auction event at a Canberra auction house tonight. Saw 15 auctions, two sold, one sold prior, 12 passed in.

    Aaaahhhhhhhh.

      • Heheh.

        I didn’t keep a conscious count of how many properties had no bids at all but it would have been five or six at least.

        What do you reckon, auctioning in Jan = desperation? One was a new build auctioned today for settlement in June. Certainly smelt like a desperate rush to me. Anyway, no bids on that one either.

      • Youd have to have rocks in your head bidding on that new build. Pay your deposit and end up with a pile of sticks when they go broke half way through.

      • Ah sorry – no, the new build was finished. I assumed they needed to delay settlement until June to get some other benefit (CGT discount? Rent it out for 6 months to claim a sh!tload of depreciation?) but were rushing to market now to lock in some sucker prior to the impending falls.

      • I mostly think anyone going to auction in Jan is desperate or foolish – can’t believe the agents would recommend it, very cynical.

    • And what is government, council or the ATO doing about it? Nothing, they are cheering it on. Cvnts, the lot of them.

  9. House price falls prompting Australians to sit on their lands: NAB survey
    https://www.abc.net.au/news/2019-01-24/australians-opting-to-renovate-rather-than-sell/10746220

    South East Queensland won’t cope with future transport demand without these 47 projects, mayors warn
    https://www.abc.net.au/news/2019-01-24/queensland-transport-infrastructure-plan/10745918

    BuzzFeed Plans Layoffs as It Aims to Turn Profit
    https://www.nytimes.com/2019/01/23/business/media/buzzfeed-layoffs.html