Macro Afternoon

Asian share markets are gaining in confidence despite the lack of a lead from a closed Wall Street overnight with the USD slipping against all the majors, as the PBOC let the Yuan weaken again today. With Wall Street and The City reopening tonight there should be extra volatility and opportunity available!

The Shanghai Composite has pushed above 2900 points, currently up 0.7% to 2913, while the Hang Seng Index is looking to close at a similar advance as well, up 0.6% to 27463 points, finally not making another new daily low. The daily chart has been showing a deceleration pattern with a bottom potentially forming here at the 27000 point level:

S&P and Eurostoxx futures are both up slightly with the four hourly chart of the S&P500 chart showing a potential follow through above the Friday closing session at the 2830 point level. Notably, there’s significant resistance overhead at 2840 and the 2850 or so points to punch through first:

Japanese share markets are up slightly again with the Nikkei 225 closing 0.4% higher to 21271 points but still looking in a weak position after correcting for most of May.  The USDJPY pair tried to push higher but remains stuck at the mid 109’s and still in trouble as it lurches sideways:

Australian stocks put on some solid gains with the ASX200 lifting 0.4% to 6480 points ,trying to get back above previous support, now resistance at 6500. The Australian dollar is trying again to breakfree alongside other undollars as it slowly climbs above the 69 handle but it will come up against Monday’s session high at the 69.40 level going into the European session:

The economic calendar continues tonight with some German import and business confidence numbers followed by US house price figures for March.



      It remains clear to me that banks want to have people minimum expenses be as low as possible so they can loan them as much as possible and therefore make as much money as possible.

      The HEM should be outright banned as some kind of floor. Nobody in Sydney can live on the amounts they are talking about unless they catch public transport everywhere, don’t ever eat out, don’t shop at Cole’s or Woolies, never need new clothes and count every penny in a spreadsheet. Which most people simply do not do…

      Couple that with credit cards, school fees, nursing costs, pet and vet costs, monthly subscriptions to services and all the other 101 ways rent seekers take money from your pocket in this country. It simply cannot be done.

      I recall some documentary in the US shaping a couple trying to live on benefits as part of an experiment to see how they would cope for a couple of weeks. They basically said it wasn’t possible.

    • Makes a case mostly on credit availability. Only throws in the towering existing debt burden right at the end. Doesn’t mention that the economy is sh!tting the bed.

    • That clown quoted auction clearance rates as though they were a true thing. ROFLMAO.

    • This article is aimed at the RBA decision next week. The banks want 0.5% not 0.25% so they are pumping out articles like this….

    • Mr Morrison knew what he was doing………imagine the demos by blighted specuvesters in Australia… would be a lot worse then these Canadians who want the drug money back.

      It really is a mania and concerns a lot more of peoples savings world wide than the stock market bubble in the 1930’s ever did. The ramifications when this blows are going to be huge beyond understanding.

      • Which is why central banks haven’t yet found the right moment to let it collapse. They need a credible excuse to tell the people or else… probably nothing

    • Mark Lathams Brain

      Go through the actual sold properties for last weekend – my god – what a steaming pile of methane infested necrotic carrion.

      To be fair there was one nice place in Clifton Hill.

      The stink of desperation needs a strong slosh of lavender and tea tree oil on the face mask to avoid dry retching.

      Huawei just revealed its Hongmeng (Genesis) operating system which will run both Android and Windows – impressive as hell. They were working on it with Yale, Harvard, MIT etc, etc in secret for years and it has been yanked from under them. Should start seeing it in the next few months – absolute disaster in every respect.

      The big move was meant to block Huawei from Android and leave them stranded – looks like its going the same way as the micro-processor move with China now launching their own mobile AI chips which some are saying are better than Apples.

      In other words – in coming trade war economic implosion.

  1. So yesterday this came up in my Youtube recommended list.
    Growing Up White & Working Class | Britain’s Forgotten Men

    I can’t help but think this is happening here, not at the same rate of decline but the working class is being left behind by mass immigration and jobs that have moved away from manufacturing and production of goods towards, services, IT, global businesses etc.. (zero hour contracts, think of Uber etc.. the gig economy and on and on).

    It’s all going to boil over at some point and I think we’re seeing that with Brexit etc..

    • Lol no, the ‘working class’ here in Aus all have an investment property portfolio and are therefore above the working class and are now middle class. Remember property debt is good debt so it doesn’t matter, it’s what you have that matters

      • The Traveling Wilbur

        We will decide the manner in which we purchase investment property and the number of jetskis we choose to park on it.

  2. haroldusMEMBER

    The comments being disabled on the Timmy Wilson page shows why we can’t have nice things.

  3. Hugh PavletichMEMBER

    China showing signs similar to Japanese housing bubble that led to its ‘lost decades’, expert warns | South China Morning Post

    China’s empty homes may prove a bigger threat than Donald Trump’s tariffs … Michael Janda … ABC News (Australian Broadcasting Corporation)

    • Mining BoganMEMBER

      Now call me cynical, but the timing of a lot of doom and gloom being produced just after the election has me thinking that Scummo had told all business leaders to hold off until after OL Bill took power…only he didn’t. There seems to be a lot of boobytraps going off in Scummo’s face.

      Oh, and why is the headline union says such and such? Why not just altona shuts because gas crisis? Again, call me cynical but the punters have been trained to think union bad so just throw the union bit in to avoid anyone taking the gas crisis seriously. They’ll blame the unions for it somehow.

    • Was speaking to a builder/TAFE Teacher mate about Brickworks importing bricks from Argentina. His immediate response was to rail against Brickworks for importing cheap st!t from overseas to save a few bucks.

  4. Mark Lathams Brain

    Mentioned this above – but it deserves its own post –

    Hongmeng – Huawei is releasing its secretive operating system it was developing with Universities around the world including in collaboration with the US MIT, Yale, Harvard and many more has been pulled from under them and is now being launched.

    It is capable of running both Android on mobile phones (all their apps) and Windows in desktop mode. Seriously quite impressive.

    I honestly don’t think Trump was aware of this when he forced Google to cut ties – this will cause fragmentation and like the micro-processor move a few years ago which spurred China’s rapid rise in Chip development will not hamper China, but rather empower it.

    Apple sales / share price collapsed 17% and is looking like losing another 30% as it fell behind first Huawei and then Samsung to go from first to last in the flag ship stakes.

    Things are going pear shaped.

  5. The Traveling Wilbur

    Gone long bonds et al (finally).

    Expect the RBA will probably hear about it and raise rates on Tuesday… sigh…

    • The amount of back slapping and counting of chickens that is going on around a June rate cut makes me think it would be pretty hilarious if they held.

      They could too – with APRA and stimulus coming, why not hold off?

      I mean, they won’t. And in the short term I’d lose money if they did. But it would still be kinda funny.

      • The Traveling Wilbur

        It would be both funny and typical (of the RBA).

        Fortunately my current bid isn’t specific to Tuesday (the TAB looks like the best instrument for those plays) but diversified bonds everywhere (now that the US is done raising and everyone has fiiiiinally figured out that the Euro Zone is growthless (which was obvious 12 months ago) it seems like a no brainer). Still lots of bond yield falling to go everywhere I think. But especially Australia. Wish I’d got that sorted 3 months ago though.

    • Interesting Wilbs. Which instrument is that through – an ETF or something else?

      • The Traveling Wilbur

        LOL. For what I did do, that was super related, and I do not do self manage, so it’s the standard Diversified Bonds (as Fixed Interest is a truly misleading name) option.

        Years ago, after a little research, and some measurements to confirm, found out my super fund’s Australian Shares option is just one giant proxy for the ASX200 ETF. Just that, with dividend credits. The Diversified Bonds option will be similarly brain dead. And is International and Australian. Perfect right now, even though it’s hedged. All the brain dead ones everywhere are hedged.

    • Nutty – that’s the sort of cowboy move I’d expect to find in China. Outrageous. I’m wondering if the developer is Chinese based or the money for the development is Chinese money (I was told there was a lot of Chinese money went into building out Lawson, and it looks like TP Dynamics started off in Lawson).

      Also, I think that site in Bruce is just across the road from the notorious Elara Apartments. It is almost as if Bruce is becoming a cesspit of dodgey building practices.

  6. Simon Johnson has it as starting between 1983 and 1985, when bond trading and pay moved up in a very big way.

    From his classic article, The Quiet Coup:

    Not surprisingly, Wall Street ran with these opportunities. From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent. Pay rose just as dramatically. From 1948 to 1982, average compensation in the financial sector ranged between 99 percent and 108 percent of the average for all domestic private industries. From 1983, it shot upward, reaching 181 percent in 2007

    So that begs the question of whom forwarded and then enabled such machinations, would seem absurd to pin it on some pinko commie socialist feminazi progressive lefty sort of thing.