Macro Afternoon

A boisterous start to the week here in Asia with almost all stock markets following the big night on Wall Street on Friday. This was despite growing macro concerns with Japanese machine orders falling, another possible round of tariffs from Trump and a slump in Chinese car sales. The USD continued its slide, albeit at a slower pace with the Australian dollar rising against the crosses too.

The Shanghai Composite launched out of the gate, putting on over 2%, currently at 2737 points going into the close. The Hong Kong Hang Seng Index is having a solid day as well, up 1.6% to 28347 points. This doesn’t make it a new daily high but it’s very close as momentum picks up after Friday’s poor showing, the trend is not yet over with the low moving average still untouched:

US and Eurostoxx futures are up in line with other risk assets with the S&P 500 looking to build on its surge on Friday night, with the 2800 point level the target this week:

Japanese stock markets put on a very solid show as well, with the Nikkei 225 about to close nearly 2% higher, currently at 21282 points, getting back above key resistance that had been broken briefly last week. This is despite a slightly stronger Yen with almost no change in the USDJPY pair as traders await the BOJ and domestic policy makers on the slowing macro situation. I’m watching key support at the 110.20 level closely tonight:

The ASX200 was the weakest in the region, unable to hold onto significant gains earlier in the session, closing only 0.4% higher as banks dragged the bourse along, closing at 6089 points. The Australian dollar kept up the buoyant mood from Friday night, lifting up to the mid 71s against USD and also rising against YEn. This keeps it well above last week’s session highs and does set up for another rally to the 72 or even 73 handle before the next RBA meeting:

The economic calendar starts the week with almost nothing of note, keep an eye on US politics for a laugh I guess?

Comments

    • You know it might help some to drop the ethnic shtick and frame it as cheap labour hire to buff bonuses for the big end of town with a side of investor buffing to get there … nothing like dividend manna from above to get the churn primed ……

    • I heard this being addressed on abc Melb radio. The host Raff just downplayed it and said that this had been brought up years ago so it doesn’t matter.

  1. Well that 4 Corners effort was an anticlimax and a beat-up. And just how dozy were those ex-plods.

  2. The Traveling Wilbur

    https://publicdomainreview.org/collections/bon-mots-of-the-eighteenth-and-nineteenth-century-1897/

    Page 142 could have been written about MB, by, well, most of the current members. Gives me some certainty that footsore (whose fault this all is) is actually the 18th century gentleman podiatrist and philosopher of yore I’ve always taken him to be. But as with all deductive reasoning, best to tread carefully lest one’s gate prove wider than one’s stable.

    He was only a little horse your honour…

    • MB bon mots? Only if Haroldus started an AC/DC cover band where they replaced the lyrics with the words of a true wordsmith.

      In fact, I propose it to be possible. They shall, by necessity, be called The Bon Mots.

      Angus always did look a dandy in the schoolboy’s outfit. We’ll keep it. Stagmal’s the one.

      AC/DC’s singer’s elocution, well, one gets more sense from reading encyclopaedia Skiptanica than trying to strain meaning from that primordial soup of vowels and consonants. The most eloquent among all is Reusa. As in life, he shall lead the band. His posts shall replace whatever it was those two barbarians were attempting to communicate. They were probably whining about the heater not working or the roof leaking or some other insignificant trifle.

      The drummer was mad and paranoid. Or paranoid and mad. It doesn’t matter. We’ve a nigh endless supply. Even if we were to go through them like an ‘Aliens vs Spinal Tap’ film more would keep coming. (If there is ever a shortage LVO can just up the immigration and Greens article quota.)

      Rhythm guitar….. To harmonise and lead… perhaps there is one. Our self outing workplace dictator, Gunnamatta. He’s not the Ike Turner we need, he’s the Ike Turner we deserve.

      Haroldus is on bass. Sorry old chap. We just couldn’t fit you in any other way.

      Ermo’s spruiking abilities means he’s on merchandise. He’ll be a little Timmy Wilson slipping those Labor membership forms into the record sleeves.

      Touring. First show, Opal Tower rooftop. (Keep the bass to a minimum please haroldus.) Then Narau and Manus Island. Their hospitality is internationally renowned and Mr. Abbott assures us that they are very lovely places. After that The Bon Mots shall be the headline act of the grand reopening of Christmas Island. Followed by Geelong, Cairns and Dubbo. Other dates to be announced.

      Done.

  3. The Traveling Wilbur

    Don’t pay the swamp cleaner.
    Don’t even fix a price.
    Until the bog’s been strained.
    From side to side.

    • Well that’s a step forwards.
      The call so far has been “meet the new swamp….same as the old one”.
      At least we have moved to ‘ don’t pay him yet…jobs not done’….or am I reading you wrong?

    • The Traveling Wilbur

      Close.

      Moved from, different, but just as interested in lining his own pockets so that it makes no difference, to, hmmm… this is definitely different, and who knows where the collateral damage might lead.

      But there is no swamp cleaning… more a tango of temporary tossers filling half the appointments available. He’s essentially letting the public service run itself, and that does get a thumbs up from me.

      The billions he’s handed out in tax cuts to those who don’t need them… not so much.

  4. Well then.

    https://www.theaustralian.com.au/business/property/firb-report-chinese-property-investment-drops-17-per-cent/news-story/96f65bbe004b70e06c796eb8b277241c

    “In a sign of the property slump in full swing, the value of residential real estate approvals dived nearly 60 per cent, falling to just $12.5bn in the 2018 financial year, reflecting the dramatic slowing in foreign demand for residential real estate, according to the Foreign Investment Review Board annual report released on Monday night.”

      • Elaborating on my Australian entities comment. An off-the-plan purchase of an apartment meets Australian rules (new property), and also meets the Chinese capital control rules to transfer the 10% deposit. You can (or at least could) get the funding for the balance in Australia. There is no need to purchase via an Australian entity.

        Every other purchase of existing residential property, or paying via cash is illegal. Two scams:
        1) Dirty money purchased property via shelf companies.
        2) Think about all those 20yo students buying expensive properties. The scam is : international student -> residency -> launder parent’s money -> buy residency for parents -> parents have “no assets” and eligible for welfare benefits after qualifying period.

        There are syndicates of Chinese people who each launder $50k pa into the country on someone else’s behalf.