Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Outside China it’s been a flat finish in the Asian session with most stock markets putting in scratch results as the US/China trade talks recommence. Currency markets are also sanguine although the Yuan has weakened for the first time this week leading into tonights NFP print.

Chinese shares continue to move higher with the mainland Shanghai Composite currently up more than 1% to be over 2600 points while the Hang Seng Index has fallen about 0.3% to finish at 27867 points, taking a small breather here after resoundingly finishing the week above the previous false break high above 27100 points:

US and Eurostoxx futures are pulling back slightly with the four hourly S&P 500 futures chart showing a small reversion to the high moving average after getting a little ahead of itself last night. Confidence remains high going into the unemployment print:

Japanese stock markets are flat with both the TOPIX and Nikkei 225 exchanging a small loss for a small gain, the latter upabout 0.1% to 20788 points. The USDJPY pair has continued its overnight bounce but is finding resistance at the 109 handle:

The ASX200 is also flat, only down a few points with caution reigning, closing at 5862 points despite a lower Australian dollar. The Aussie has fallen back towards the 72 handle after the recent spike and could falll below that level proper tonight:

The economic calendar finishes the week and starts the month with the most important event on the calendar – the January non-farm payroll (NFP) or unemployment print from the US. But we also get the January Eurozone CPI print beforehand and after, the US ISM manufacturing print.

Have a good weekend, the boys are back on deck from next week and I’m back to trading wiggly lines on screens, til next time!

Latest posts by Chris Becker (see all)


  1. This, guys, is about the second largest commercial empire, on the planet.
    As Credit Suisse tells us, Europe has stalled.
    18 weeks to go to their elections, about the same as ours
    But, some of those guys in Europe “intensely dislike” each other??

    Could be a good year to just sit on your hands.
    Like they say in FNQ, never provoke the crocodile till you are across the river.

    • And from Skippy and Gunna.
      Ooooh … Deterministic Mathematical Models mixed with a bit of GT and you have mainstream economics WW …. watch out for the first ex ante axiom …. been known to swallow whole swaths of humanity regardless of outcomes for protracted periods …
      It is totally mind blowing that the progressive left wing has foisted the “migrant” issue onto Europeans – AGAIN – as if history has not shown us since Ancient Rome how mass migration, foreigners, are treated. There are not merely one or two instances such as the Jews to look back on – but literally HUNDREDS – and every time the economy goes south, the hatchets come out.
      The responsibility for this lies 100% at the feet of the elite progressive left. No ifs, no buts, no maybes.

      • Reply to same thread that should be part of the observation ….

        Divide et impera ….

        Sorry …. but when did Ordoliberalism become affiliated with progressive lefties anything ….

        On the other hand I do understand the perspective of being the dumping ground for War Inc, by the machinations of the far right, after so many decades of havoc for profit in weaker nations having a sociological twist. But as always the far right seems to have a penchant for externalizing its failures and manufacturing scapegoats out of whole cloth e.g. it was the left …. chortle …

      • I would only add the allied baggage foist on Germany post WWII [lets not observe the Nazis with hall passes or the fact that previous held ideology acerbated it and it being the coal face for the cold war or anything and then due to proximity absorb the consequences whilst the U.S. enjoys its superiority in Mfg post conflict {lack of social and Mfg rubble equals bargaining power} – wheeeee Prescott Bush and co . Which inevitably empowered and enabled the same ideologues and wealth set to reassert themselves, post the great depression losses, which curbed their oligarchical tenancies [mix of religion and useful agnostic adaptions].

        Which then for some strange [tm] reason U.S. corps started using legal – political pond stocking to loot their very own citizens [cough consumers – wages vs productivity and equity pumping due to stock holder value memes] and free market globalization [financial elitist – removed physical colonialism] expansionary period ensued [see B. Clinton].

        Then muddy the waters with Cultural Marxist or anything else say the good old Libertarian Marxists [all sorts mix of volunteerism et al free will [tm] sorts [see atomtistic nihilism] ….

        Lmmao … government was privatized with a profit incentive and LBO’ed Muger style then some are want to blame it on the left …..

      • “they started it”

        Sorry WW but that befouled the logical argument – they – is without supporting anything …. might as well said the ev’bal did it…

      • Divide et impera

        Not sure what you are saying about my comment here – this thread is quite abstract. Certainly Skippy below appears to be talking in Morse.

        Do you think I am ultra right wing ? I’m not. I’m left wing – I just acknowledge the mistakes of the left.

        The most pertinent phrase I’ve ever heard is “the path to hell is paved with good intentions” – its perfection.

        Its true.

      • Divide et impera…

        Your abstractions about understand is not a logical argument and if you may don’t project your ignorance as my failing … Ta ….

      • right… so it was the progressive left who inflicted a synthetic gold standard and austerity in Europe?

      • Divide et impera

        You haven’t got a clue and you’re drunk.

        Listening to people rant on about stuff like you do is like listening to someone claiming the Melbourne cup finished at the third corner – honestly. Do you have any idea how selective and self serving your logic is ? Its entirely subjective blathering hubris with no other purpose than to assuage your predilection for indulging in yourself. Its honestly quite revolting for its almost ubiquitous lack of consideration beyond the most basic considerations.

    • Kenneth clearly has no time for the media circus and he understandably has no regard for the man sitting opposite him.

      On the other hand, Josh is just happy that someone is taking his photo.

    • Wow Hayne is very very unhappy to be there.
      Awkward in the extreme.

      What moron had the brain fart to stage that little media event?

    • That is the sort of bear porn that will make you go blind. Either Hayne been done over and wants to strangle the bastard or the contents of those documents are truly sinister.

      • To me Hayne’s body language looks more confident and sure of himself – more like a guy who knows he will win but doesn’t need /want to gloat.

        As usual Fberg looks like the work experience kid filling in while the Treasurer is away.

      • Mining BoganMEMBER

        Sinister eh? Well, The Hungarian does look mightily happy. He’s not the type who smiles at ducklings or cute puppy videos so maybe the report has been nobbled.

        In saying that, there’s always that Russia thing that only imbeciles smile at strangers…

      • The Traveling Wilbur

        Those are not mutually exclusive propositions Geordie, and well man, that’s wha I’m expecin’ will cum outa’ this sorry exercise dont’ya no.

        It’ll be freckin’ must see TV for months if Hayne has dun us proud. Looks AOK so far.

    • TailorTrashMEMBER

      Mr Justice Hayne is Mr Justice Hayne ( or I’m a real bad judge ) …………..Mr Dickhead Frydenberg is Mr Dickhead Frydenberg.( or I’m not a real good judge )……silly smile complete .

    • Looks like a stone cold killer. There for business and nothing else.

      Frydenberg got dat dere polished pollie smile going.

    • Josh got owned…

      I think the gov’t has no choice but to implement the recommendations in full. What message would it send to the country’s creditors if it doesn’t? They’re caught in a pincer…no or minimal action risks further credit tightening/loss of confidence and it will be directly attributed to the coalition gov’t.

      • Divide et impera

        Theres 12 weeks till the election – and 1 sitting day of parliament – this government will do nothing.

        They are all sitting there waiting for the half dozen RC’s coming up which will see whatever remains of their tattered crusaders defenistrated directly to the gallows.

        Most basic group of intellectual feebles assembled since I stowed a bunch of dead star fish home from Frankston pier.

      • proofreadersMEMBER

        It’s almost like it’s got a bit of the “not suffering fools lightly” touch to it?

      • Divide et impera

        Not as telling as how gutless that eviscerated pile of scat is sitting next to him who can’t fathom the Cajones to even meet his eye.

        The footage of him with Weatheral is the most blistering dressing down I have ever seen – utter far king quality.

  2. Cullen Roche on the exciting world of MMT

    “..Modern Monetary Theory (MMT) is in the news a lot lately. And that has resulted in a number of “critiques”. Most of these critiques are, to be blunt, trash. You see, the thing is, MMT is really, really confusing and most people don’t get it right at first. So we tend to see lots of “critiques” of MMT that aren’t based on a sound understanding of it. I know this because I went through a phase almost 10 years ago where I first encountered MMT, thought it was largely right and then realized it had some potential problems. I critiqued it and learned along the way that some of my early critiques were wrong. I’ve learned a lot over this time and I still think there’s a lot more good than bad in MMT. But for those interested, here’s how I see the good, the bad and the ugly in MMT…”

    • MMT discussed in this week’s MacroVoices post-game segment (after main interview).

      MMT protagonists that believe it will reduce wealth inequality are not paying attention to the role of inflation in the current wealth inequality. i.e. buy 10 houses with money that is not yours, let tenants pay the interest, and wait for the debt to become worthless, presto, you own ten houses that someone else has worked to pay off.

      Lefties cheering this on are insane. FFS redistribute wealth by taxing the [email protected] out of people with 10 houses. Don’t make it easier for them.

      • Freddy,

        Thanks will check it out.

        I long ago gave up trying to work out what MMT protagonists believe.

        I think they agree that motherhood is good.

      • MMT does not engage in political preferences, only describes the potential for political expenditure of a sovereign issuer- caveat mostly concerning developed countries and not developing due to maturity and by the dint of it legal rights with expectations of fulfillment ….

      • “MMT does not engage in political preferences”

        That is correct. Wealthy right-wingers absolutely love the idea of stealing even more wealth from savers, all under the pretence of helping out the poor. It is a more brilliant hoodwink than trickle down. Maybe they’ll call for zero taxes with all social spending via money printing. A combination of trickle down and MMT. What could possibly go wrong?

      • Until some have a noob level of understanding with the human tool user problem and use ex ante mumbo jumbo to connect the dots don’t expect much change ….

      • Great goat… I think you have a completely detached perspective to the economic term of savers …. hint its not the unwashed …

      • Great goat…. and then some wonder why the so called left went on a unicorn, hunt not unlike their opposites e.g. because they forgot how the payment or national monetary actuary system works, especially since the far right market posse has been in control.

      • So true,

        Plus it’s a bit easier to sell to the plebs than trickle down, which sounds like what it is… them getting pissed on by the rich.

      • MMT is not selling some ideological utopia created out of whole cloth by a bunch of creative class writers, set up by the financial elites, just the opposite, it strips away the illusion that a sovereign issuer is beholden – too – the machinations of the financial elites and their ideological bedfellows.

        But then again it has been noted that the so called left went on an arts and crafts journey and completely lost any knowlage that it had – previously – about how functional finance or monetary systems work.

    • So, when Scott Sumner refers to reserve notes as “paper gold” he’s really not referencing the power of a Central Bank. He’s actually referring to the issuer, the US Treasury which makes Sumner an ironic/funny kind of way. And this is the problem with parts of Market Monetarism. If you don’t respect specific institutional arrangements you end up saying things that make no sense when you consider the actual design of the system.”

      Wheee …. “I” live in a artificial construct and opine away …. my ideology predicates it …. no thinking is necessary … I must obey … free will demands it … chortle …

      • Divide et impera

        MMT is an acronym for tard.

        Did you ever hear about that story with the kid going to market and he sold his cow for some magical beans that would make him rich with a never ending supply of money….?

        Yes it was called Mike and the Magic Tree.

      • Divide et impera …

        If you don’t understand or have the knowlage to engage the topic, why bother with incoherent babel* …

    • Divide et impera

      God knows best.

      Just like the invisible hand – which can allocate resources perfectly.

      So much belief in far king magic it makes my gonads itchy.

      Now we have a magical money tree……please……do go on – its like listening to the joyous sound of anti-vaxxers espousing the virtues of water tempered with milk wood – who else believes in magic water ? Oh – thats right……

      • The only Magic around is what underpins mainstream economics during the neoliberal period and its predecessors before it, but then the Cambridge controversy clearly showed some are want to stick to dogma just out of intransigence.

    • The Ugly:

      1. MMT does not have a plausible theory of the interest rate. It claims movements in the money rate of interest have no effect on demand. Ironically this is a super neutrality argument (ie. completely anti Keynesian). Why do the high priests of MMT claim this? Because they know the theory makes no sense if movements in the money rate of interest effect demand. The cult followers haven’t cottoned on to this so they almost never mention interest rates – which is bizarre for what is meant to be a monetary theory. Notice Roche doesn’t mention interest rates once – I’d suggest he is still battling with MMT.

      2. MMT thinks money is endogenous because CB’s supply whatever qty is necessary to hit an interest rate.
      What they don’t get is that the interest rate is not a target it is an instrument. The target is either inflation, the FX rate or some other nominal variable; and they adjust the interest rate to hit this target. By adjusting the interest rate they alter qty of money demanded at that interest rate. Meaning money is exogenous over medium term.

      3. They don’t get that money is an asset and people only want infinite quantities when the cost of holding it (nominal rate) is zero.

      4. They think a collapse in bond prices/failed auctions and inflation are 2 different things. They aren’t – they both indicate that the state can’t sell its paper in return for real stuff. Both indicate insolvency. If there is hyperinflation the state is insolvent. So a paper issuing government or whatever they call it can go broke in their own money. They are wrong.

      5. MMT is a public finance theory not a monetary theory. A public finance theory which says the state can finance all deficits at any point in the cycle regardless of debt to GDP with money rather than bonds

      6. Saying the State doesn’t need to tax in 2019 is about the most idiotically counterproductive thing any alleged progressive could say. See the Dutch historians comment at Davos.

      • Good grief …. starting out with factually incorrect perspectives and then building on it is not a good look ….

        MMT: The Impact Of Interest Rate Targets On The Economy Is Indeterminate

        This is contra to the monetarists and quasi monetarists propensity to use ideological driven jargon like “natural – real [tm] interest rates” when per se Milton’s 2% is viewed by many as a quasi gold standard. The strange part about – all of this – is the propensity of some banging on about the topic actually support the financial elites preferences. Its as bad as not long ago when Say’s law [tm] got taken back behind the shed and some mainstream sorts decried …. but we still – need – Says law.

        Guess you’ll get that when optics are ideological shaped and then compound error over the state of a thing.

  3. Many thanks, Chris. Champion job filling in with the additional content. Enjoy your lines..?

    • Lol…the last bastion of the specufestor…if this was true then all bitcoiners would be billionaires.

      “Yep, you are projecting into your mind, your brain, your thinking, your behaviour, …

      That is why negativity is so dangerous, not only to the one with the negativity but also to their family, their love-ones, their friends, basically anyone who has contact with them.

      There are a lot of people on PC who think the world is in a bad place. Property prices are crashing, loans are hard to get, sharemarket is crashing, incompetent governments are in power around the world, …

      I learnt a long time ago that negativity attracts more negativity. That is, because your perception is negative, you let more negativity into your life.

      I believe the converse is also true. That is, positivity attracts more positivity. As your perception is positive, you let more positivity into your life.

      So, even when crappy things are happening in your life, it is far better search for the positive.“

      • Mining BoganMEMBER

        What if I’m positive that things are insanely overpriced so I withhold my money from the game until there’s a positive effect on housing affordability and a bigger positive outcome for the community?

        Stick that positivity where the sun don’t shine buddy!

      • TailorTrashMEMBER

        @mb… ?……..isn’t that what we bundle up with our schools into our houses and then sell to foreigners .

      • Divide et impera

        You should probably invest in some crystals and incense – and maybe one of those inverse steel drums that white girls with dreadlocks enjoy so much.