Macro Afternoon

The confluence of a poor night on Wall Street, a stronger Yen, the Huawei story, plus a bunch of nasty local data has seen risk mainly taken off the table throughout Asia. Locally, traders are bidding a pup to the moon on the ASX200, while the Aussie dollar tears back on the record trade surplus, ignoring all the domestic signs of a recession.

The Shanghai Composite is treading water going into the close, up a few points to just pip above 3100 points. The Hong Kong Hang Seng Index conversely if off by more than 0.5%, currently at 28904 points, unable to make any headway above 29000 points as it fails again to pull itself out of a near week long malaise after rising too fast from its recent trend line:

US and Eurostoxx futures are falling again as caution reigns with tonights ECB meeting the laser like focus for traders. The S&P 500 four hourly chart looks extremely ominous as it craters below the lower edge of the trend channel, setting up for a reversion back down to monthly support at 2630 points or so:

Japanese stock markets were the worst performers again as Yen strengthened with the Nikkei 225 currently down nearly 1% to around 21403 points, making a new weekly low and nearly taking it back to its previous breakout level at 21000 points in early February. The USDJPY pair continues to slip after failing to find strength overnight, rejecting overhead resistance at the 112 handle with price now firmly bunching around the low moving average, so watch ATR support at 111.50 carefully tonight:

The ASX200 is the standout by actually generating a positive result, currently up nearly 0.3% despite the crashing retail sales, unsustainable trade surplus and a higher Australian dollar. It’s continueing to launch higher above 6200 points, now at 6263 points! The Australian dollar has bounced back on the trade surplus, finding very firm resistance at the 70 handle and launching nearly half a cent higher but can it get back above the key weekly support level at 70.60 or is this just a swing play:

The economic calendar will be dominated tonight by the latest ECB meeting but theres also a few US releases to keep an eye on, including the initial jobless claims and consumer credit.

Comments

  1. C.M.BurnsMEMBER

    I don’t trust central banks and their fiat currency, what with creating 1s and 0s out of thin air like some kind of financial voodoo. I prefer to trust my “wealth” (cough) with some random Crypto fund CEO, he’s totally going to be good for it. Wait, what ?

    https://amp.smh.com.au/business/markets/the-missing-195m-crypto-accounts-emptied-months-before-ceo-s-mysterious-death-20190307-p512b4.html

    Auditors finally got access to that crypto fund CEO’s laptop… spoiler alert, he was broke and all the funds had been siphoned out before he died. #hoocoodanode

      • C.M.BurnsMEMBER

        Died in India apparently. But if I had $100 million usd and wanted to fake my death, a corrupt country with 1.2+ billion ppl would be a good place to try

      • Lol @ the crypto fanatics.

        But hey. We aren’t entirely without heart. Let’s wait until the bounty gets to about 10 million (currently $100K) and then go and hunt him down.

    • The Traveling Wilbur

      @Monty

      Looks like human philosophical thinking has been wrong all this time – it would appear you can die and take it all with you after all.

  2. GunnamattaMEMBER

    Stay the course for growth
    https://www.theaustralian.com.au/opinion/we-are-growing-while-there-are-more-in-work-and-living-standards-are-rising/news-story/ef375f239f72dbf83521ba19f1bb0f1b

    MARCH 06, 2019

    §  By Josh Frydenberg

    §  12:00AM March 7, 2019

    Yesterday’s national accounts show the economy grew by 2.7 per cent last calendar year — stronger than any G7 ­nation other than the US — and sees Australia in its 28th year of economic growth. A remarkable run, particularly when one considers that economies such as Japan and Germany experienced negative quarters of growth last year and the IMF downgraded its world economic outlook.

    Today we meet a man focussed on the rear vison mirror.

    The fundamentals of the Australian economy are sound but we face some challenges. The impact of the drought is being felt, with farm GDP down 5.8 per cent, and exports were down 0.7 per cent for the December quarter.

    In the rear vision mirrors he sees droughts and flooding plains……..

    The Consumers and ordinary workers of contemporary Australia are crossing the road directly in front of him

    Significantly, the fall in agricultural production has also extended to food manufacturing, with the fall in manufacturing detracting 0.1 percentage points from real GDP growth.

    He is still looking into the rear vision mirror.  He sees a man milking.  The man has a ‘down 0.1 of GDP’ placard on his hat

    Dwelling investment has also come down from a record high in the September quarter. While still up 2.5 per cent through the year, it recorded a fall of 3.4 per cent in the quarter. This reflects a reduction in building approvals as new supply comes online.

    Still looking at the rear vision mirror he sees the Opal tower, and countless suburban lots being subdivided to create medium density housing, as countless news headlines touted never ending peaks for Australian real estate prices.  He smiles ruefully. 

    His car is running roughly, but he keeps his steely focus on the rear vision mirror

    It also underlines the danger of Labor’s housing tax and its plans to abolish negative gearing as we know it and increase capital gains tax by half. The Master Builders Association said Labor’s policy would cost 32,000 jobs and see 42,000 fewer dwellings being built, and the Property Council of Australia has surveyed existing and ­potential investors and found they were less likely to invest in newly built properties under Labor’s plan.

    In the rear vision mirror he sees the lingering refrain of those endless peaks, and has a vision of news headlines touting suburbs full of ‘best prices achieved this weekend’ and smiling faces of his voters – who all drove nice cars and were well dressed, and spoke in the clipped measured tones of the freshly affluent.  There is someone else trying to get his attention in the distance but is seemingly unable to speak.  He has more important things to do than to waste time on people who don’t have the decency to be nicely dressed and say what they want. Especially when there is a man in a suit who drives an Audi saying he is building 42 thousand houses and employs 32 thousand people.

    That idle has become a bit rough.  He makes a note to get a service. 

    On the positive side, the national ­account numbers indicate a pick-up in Australia’s terms of trade: 3.1 per cent for the quarter and 6 per cent through the year. This flowed through to nominal GDP, which was up a healthy 1.2 per cent in the quarter and 5.5 per cent for the year. The nominal GDP number is important because it helps shape revenue numbers for the budget.

    Now the magic mirror is cooing ‘wang, wang, wang, nothing makes you feel good like numberwang….’ As a mesmerizing saxophone solo joins a guitar strum

    It is also worth pointing out that our budget forecasts for commodity prices have been prudent with MYEFO, factoring in bulk commodity prices well below today’s spot. Indeed, with strong production volumes and commodity prices, mining sector profits are up, contributing to an overall lift in company profits of 3.2 per cent in the quarter.

    ‘wang, wang, wang, nothing makes you feel good like numberwang….

    ‘Wang, wang, wang, the mining sector employs only 2% of the workforce…..

    ‘Wang, wang, wang, and the miners pay taxes in Singapore….

    ‘Leaving the budget heavy lifting to some other schmucks somewhere, of course…..

    With nine out of 10 employees in the private sector, profitable companies are critical to the strength of our economy.

    ‘Wang, wang, wang the private sector doesn’t like paying tax much, but loves coolies and gouging the cojones of employees, and bullying malcontents…..

    That roughness in the ride is getting steadily worse.  But he knows he needs to keep the focus on the rear vision mirror.

    Non-mining investment is also fundamental to the economy and there were good signs in the recent capex survey of business and in the national ­accounts where non-mining investment was up 4 per cent across the year.

    The product of this business investment is that employment growth is strong and wages are gradually rising. With unemployment at 5 per cent, the lowest level in seven years, the wages bill for the economy is up 4.3 per cent.

    ‘Wang, wang, wang, that pretty little buxom thing is making eyes at you.

    Wang, wanng, wang, she wants to whisper in your ear, ‘you’re my hero’

    Why don’t you head on over and put her where she wants to be….

    Living standards, as measured by real net national disposal income per capita, are up by 2.1 per cent through the year compared to negative 1.2 per cent during Labor’s last year in office.

    ‘Wang, wang, wang, You’re really good for her…..

    Real net national disposable income is a much more comprehensive ­indicator of living standards than GDP per capita as it measures the amount of real income available for Aust­ralian residents to spend or save.

    Wang, wang, wang, it isn’t how big it is but how you use it, ooooh, ooooooh….

    Wages growth is a core focus for this government. While the wages price index is up 2.3 per cent through the year, there is more to be done and our plan of lower taxes, more trade and significant infrastructure ­investment will deliver more jobs and higher wages.

    Wang, wang, wang, is the earth gonna move for you babeeeee……

    The Reserve Bank governor says “wages are rising more quickly in ­almost all industries and in all states than they were a year ago. This is good news and we expect this gradual lift in wages growth to continue.”

    Wang, wang, wang, and the Reserve Bank Governor says you will never want another man……

    The strength in our economy is the result of sound economic management. This has been recognised by the IMF and OECD — and the major credit rating agencies have praised Australia for our “robust economic performance”.

    Wang, wang, wang, you’re so big and so strong, you’re robust……

    Our AAA credit rating has been ­reaffirmed, with Australia only one of 10 countries with a AAA credit rating from the three leading agencies. Significantly, next month we will deliver the first budget surplus in more than a decade, while continuing to provide record funding for essential services such as health, education and infrastructure that Australians need and rely on.

    Wang, wang, wang, welcome to Jamaica have a nice day!……

    It is now more important than ever for Australia to stay the course, keep a steady hand at the helm and not put our economy at risk with Labor’s plan for $200 billion in new taxes.

    All of a sudden he hears an irritated toot, and is aware the lights have changed. In his embarrassment he gesticulates hurriedly to the number 200 on a big billboard, as a large crowd stares intently at the sort of moron who simply adds to their day to day aggravation by errantly spouting bullshit, to hide the fact they have made a blunder and aren’t paying attention. The car lurches and then cuts out in the middle of the intersection, and a big cheers goes up all round, as the horn players both behind and coming across the intersection the other way join in……

    He is having one of those days….

    Josh Frydenberg is the federal Treasurer.

    He is also a tosser who likes to fob people off with some time in the rear vision mirror

  3. “I reckon my clients did well compared to the others … considering banks are not lending to off-the-plan sales,” he said.

    “They bought the unit in the hot market, thinking they would buy it, hold it, flip it and make a profit. But the market changed, especially with high-rise developments.”

    Four friends had purchased the unit in the hope of flipping it for a profit but had to exit due to funding issues.

    https://outline.com/kSchRf

    • Yeah saw that and enjoyed it immensely!

      Especially “banks are not lending to off-the-plan sales”.

      Ok he’s an agent so presumably a compulsive liar. But if that’s really true, it is all over.

  4. MediocritasMEMBER

    Here in Perth, an email from a local RE agent:

    Hi there,

    The news in the market place is starting to feel more positive.

    There are indications of population growth and new projects on the horizon, both of which may create some nice momentum in our property market.

    On our home front, we moved our Property Management office into our head office at the end of last month. Our team, phone number and passion for property all remain the same, however we are enjoying all working together under the same roof. Our office address moving forward is- [redacted]. If you’re in the area, pop on by to say hello.

    Kind regards,

    [redacted]

    Haha. Delusional.

  5. Rental story.
    I put in a maintenance request a few weeks ago with only a few “we’ll get around to it” replies to my follow ups. Today I told the agent that if the landlord wishes to lose a tenant in this market when my lease expires in a few months they should meet their obligations. It’s now action stations.

    Even if I go in it’ll be ready for whoever takes my place. As they say, you should always try leave something in better shape than how you found it.

    • Landlord only needs to give you 30 days notice before lease expiry vs 90 days after. Best not to threaten unless you are prepared to follow through.

      • It was apparently on the market for three months before I took it. I’ve checked the rental market and I could find a place a lot faster than they’ll fill the flat. And I’m umming and ahhing about staying regardless. I’ve nothing to lose.

        My neighbours have also told me about how they treated the last tenants. If I can give the LL a fraction of the grief they caused the tenants I’ll consider the ledger a bit closer to being balanced.

      • C.M.BurnsMEMBER

        30 days notice while covered by a lease contract is only under specific circumstances – mainly they are actively selling the property.

      • innocent bystanderMEMBER

        varies from State to Sate.
        Here in WA after lease expires you are on what is known as a periodic lease. Owner has to give you 60 days. Tenant has to give 21 days.
        During a lease owner has to give 30 days if they want you to vacate at end of lease.

    • reusachtigeMEMBER

      You’re the sort of tenant that I send my Pacific Islander contractors around to see. I wouldn’t ever bother giving you alternative payment methods.

  6. Remember that Canadian crypto CEO who had the only keys to the $US137 million crypto, and who mysteriously died in India in December?

    Well they finally managed to access the information on the guys computer and guess what? All the money had disappeared.

    Experts finally cracked the laptop of the crypto CEO who died with sole access to $137 million. But the money was already gone
    Business Insider Australia

    MONEY & MARKETS
    Cracking the Quadriga case has been near impossible. Millions of dollars were missing after a crypto CEO died without sharing the passwords to his accounts. Investigators cracked his laptop only to find the money was gone. Gerald Cotten, founder of QuadrigaCX, was thought to have had sole access to the funds and coins exchanged on the cryptocurrency exchange. After his mysterious death in December, his colleagues said about $US137 million in cryptocurrency, belonging to about Read the full story

    https://news.sky.com/story/quadrigacx-crypto-wallets-were-emptied-eight-months-before-gerald-cottens-death-11656527

  7. rentsailorMEMBER

    Great to see Leith getting the message out there to the masses.

    Definitely forwarding that video to all the bubble deniers I can find.

  8. Oh god, another classic from Whingepool.

    Hi Guys,
    I bought a land but did not realise that I cannot sale the land without building a house. Neither solicitor nor vendor told us about this condition.

    Now that the settlement has been done we are are stuck.

    Can you guys please suggest me what to do?

    We’ve no plan to move in or build a house.

    codebased writes…

    Neither solicitor nor vendor told us about this condition.

    it was in the contract you signed if you bothered to read it

    Thanks for rubbing salt and yes I did mistake, which is why we hire legal and they did not do the right job. Anyways, please let me know if you have any useful suggestion.

    The terminology “bought a land” comes up a lot. I’m pretty sure thats Chinese rather than Indian. Hard to tell which vibrant is speculating and doing our younguns out of housing these days!

    • Gav, you’ve obviously been looking around a lot. What’s your consensus of what they show in the pics and real life? There is a sh1tload of stretching and photoshopping going on with just about any house that’s not premium and done by a proper photographer.