The Aussie dollar is still selling:
As bonds take off:
With stocks:
Led by the Big Iron melt-up:
Big Gas is up on OPEC and Russia:
Big Gold is losing steam at DXY regains it:
Big Banks are back. They ought to run on the yield trade for a bit, right into a crumbling economy…
Big Realty is mixed. There’s not a lot of reason in DHG crashing while REA firms up:
Blessed is the RBA.
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Macro Afternoon
Asian share markets are loving the
BlackRock: Australian dollar to 0.65 cents
Via Bloomie: The Aussie will extend this
Macro Morning
By Chris Becker A big night on risk
Australian dollar lifts on Draghi, Trump everything boom
DXY was firm overnight as CNY popped but EUR
Lots of players are underweight ASX
interest rate lower much lower
Hedgies are short banks
No margin lending in shares
Where else is there to go
Companies have better balance sheets than pre GFC
Think we are headed to test 2018 highs and have a look at 7,000
I’m going to hold back my prediction of 8,000 ASX and potentially 10,000 in this cycle
Cash rate to zero
RBA QE
Look what happened overseas with QE
Bcnich true this was also the case in Venezuela and Zimbabwe in the end if a country’s currency is worthless so goes their sharemarkets !
Agree Bonza
Worthless pacific pesos chasing better returns
It’s not about PE anymore
It’s just bubble mania and understanding how to trade
You buy when everyone is bearish and sell when everyone is euphoric
Every man and his golden retriever were short at 5500
Wait until the hedgies bottle from their bank shorts
I am going to short banks it’s maybe 2 years away
Think you need to short when every player who has shorted just gives up
It’s like a guy on this site wrote yesterday
He was too scared to short AUD because it’s bounced so many times
Everyone still thinks buy AUD on dips
I think this time around we are going to test lows in AUD and break
Think low 60s this year
ASX at 7,000
10 year bond at 1.60/70%
The short interest in bank stocks was overstated by media looking for a “Big Short” story. CBA was at around 2.1% down to NAB at 0.6% before Hayne dropped. Those aren’t big numbers cf BHP at 4.9% and JBH at 15.9% etc.
Charts are interesting here though, tapping against resistance.
https://asic.gov.au/Reports/Daily/2019/02/RR20190201-001-SSDailyAggShortPos.pdf
Bcnich my only doubt on bonds is what happens if we lose our AAA rating. Views?
Don’t think anyone cares
We will lose AAA
What a joke
Household debt 125% GDP and we are AAA
No one listens to rating agencies that are full of BS
Cash rate is going to zero
Think we have to do QE to pump liquidity into our dxx shxxx banks and share price will go through the roof
I don’t fully understand what they’ll do with QE, but Gov bonds ?? MB will know this but think we will see 10 years mid 1’s if not lower and AUD caned at that stage
Think we could see 10,000 this time around and DOW at 40,000
Think Europe and Jap might blow up
Jap is QEd out
Not sure when RBA will start QE
Guess cash rate might be 0.50/75 this time next year
Dan
They were short banks alright
Big time
I just posted the official ASIC short sell numbers. It turns out “they” weren’t really. AMP and BOQ yes, the big four not so much.
Earlier in the year the numbers were around 4-5% but most short covering happened around the interim Hayne report. Its just a good story to sell papers.
Dan, thanks for the short interest report. But what really stands out on the first page is “No responsibility is accepted for any inaccuracies contained in the matter published”
They are the corporate regulator. Why aren’t they responsible if they make an error on such a report?
Brokers are required to report positions every day at COB however they aren’t always 100% accurate (also there is a 3 day delay due to settlement so not very useful for understanding the immediate impact of something e.g. Hayne). However I’ve always found them to be accurate enough, particularly if you’re interested in the longer trends:
https://asic.gov.au/regulatory-resources/markets/short-selling/short-position-reports-table/
Dan
No offence but you don’t need to see a report to know everyone was short.
There are two types of shorts
You can borrow stock and sell or direct short I believe?
They were short and I don’t think all have got out
You mean naked shorting? Basically illegal in Australia.To short you either go through a prime broker who will arrange loan stock, or use a derivative (e.g. a warrant that will usually be hedged against borrow stock). Any of the big prime brokers or market makers, even international ones, will have very good compliance with ASIC and report automatically on their client’s trading (this would apply to most large hedge funds). Its possible that someone could borrow stock another way(e.g. direct from its owner) but I suspect this is more likely to be shonky operators in small cap stocks. They will not move a big four bank’s share price.
Hence why ASIC disclaimer says the exact number may be inaccurate, but looking at the trend is a good indication of what’s happening in my experience.
Bcnich isn’t it the case that losing the Aaa triggers automatic selling of bonds by conservative funds that only allow themselves to own Aaa paper… so bond prices should drop and yields rise (to reflect increased risk) …
Just like in the US…….huge amount of fire and fury and we end up just where we started
https://northmantrader.com/2019/02/05/something-smells/
Earnings are going no where but down here as well………I am sure even enemies like the US political parties will be able to agree on more tax cuts for squillionaires.
What would happen if all debt was extinguished overnight. Who ultimately loses. Ultimately.
People with no debt. Responsible people.
Thank goodness Australia doesn’t have any of them it has to worry about.
savers
NAB into a trading halt pending an announcement regarding leadership changes.
CHINA: Workers’ Activism Rises as China’s Economy Slows. Xi Aims to Rein Them In. – The New York Times
https://www.nytimes.com/2019/02/06/world/asia/china-workers-protests.html
BEIJING — Factory workers across China are staging sit-ins demanding unpaid wages for “blood and sweat.” Taxi drivers are surrounding government offices to call for better treatment. Construction workers are threatening to jump from buildings if they don’t get paid.
With economic growth in China weakening to its slowest pace in nearly three decades, thousands of Chinese workers are holding small-scale protests and strikes to fight efforts by businesses to withhold compensation and cut hours. The authorities have responded with a sustained campaign to rein in the protests, and most recently detained several prominent activists in the southern city of Shenzhen late last month.
Such protests are a glaring example of the challenges the sharp economic slowdown poses to China’s top leader, Xi Jinping, who has aggressively promoted the “Chinese dream,” his signature vision of greater wealth and a fairer society. … read more via hyperlink above …
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China steps up efforts to close failed zombie companies by 2020, but faces harsh economic reality | South China Morning Post
https://www.scmp.com/economy/china-economy/article/2185186/china-steps-efforts-close-failed-zombie-companies-2020-faces
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China’s hopes of becoming the world’s largest economy are hitting a major roadblock | Markets Insider
https://markets.businessinsider.com/news/stocks/chinas-hope-to-become-worlds-largest-economy-hitting-major-roadblock-2019-2-1027931209