Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Asian share markets remain on the backfoot can continue to follow the risk-off mood with falls across the region as the USD remains strong against all the majors, except the Australian dollar which has remained resilient despite a slew of bad economic prints today.

The Shanghai Composite has closed 0.3% lower but is still clinging above 2900 points, while the Hang Seng Index has closed about 0.4% lower to 27133 points, unable to arrest the recent decline. The daily chart still shows a deceleration pattern with a target at the 27000 point level but sentiment and momentum is still against it:

While Asian stocks are off, S&P and Eurostoxx futures are up about 0.5% or so with the four hourly chart of the S&P500 chart suggesting a very slim chance of a bottom here, but breaking below key terminal support level at 2800 points still signals the completion of a very bearish head and shoulders pattern on the longer term charts:

Japanese share markets are also off with the Nikkei 225 closing 0.3% lower to be just below 21000 points looking in a very weak position and restarting its corrective phase. This is despite a bounceback in the risk-on correlated USDJPY pair which is pushing up higher toward the 110 handle after recently making a new weekly low but there’s a lot of resistance overhead:

Australian stocks are the worst in the region with the ASX200 falling another 0.7% to close below previous support at 6400 points. The Australian dollar has blipped higher despite the poor capex numbers, breaking just above the high moving average to get to the 69.30 level in a very resilient move:

The economic calendar has a big one tonight – first quarter GDP for the US followed by the advance goods trade balance print.

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  1. Hugh Pavletich

    NEW ZEALAND … GOVT BUDGET … Inadvertently highlights ‘flight to affordability’ … to Australia ! …

    Face of Budget 2019 has given up on NZ, moved to Australia … N Z Herald / NewstalkZB

    The woman on the cover of the Government’s Wellbeing Budget says she had to give up New Zealand because she couldn’t afford to live here – and moved to Australia.

    Vicky Freeman said she got the shock of her life when a friend messaged her two days ago saying there was “a guy” holding her photo on the news.

    “A friend just messaged me and said ‘you’re all over the news’. And I was like ‘what, what have I done, I’m not even there’. … read more via hyperlink above …
    Read more … flight to affordability
    2019 Section … Performance Urban Planning
    How much trouble is (NZ Finance Minister) Robertson in? – Kiwiblog

    • Taxes destroy currency at a national level Gav, hence its issued as a tax credit at onset.

    • The ATO roll this sort of stuff out every year coming into tax time, just to keep a bit of honesty encouragement up.

    • This has been happening for a while. The accountant in the family spends plenty of time defending clients from bizarre ATO demands, most of which are waived when challenged. Desperate government.

    • proofreadersMEMBER

      Coming from the patron saint of franking credit refund leaners, isn’t it a bit whacko for him to be coming to the defence of genuine sufferers – retirees trying to live off fixed interest income (truly not a living wage)?

    • Plus, most of the risky borrowers took out IO fixed rates. Some people i know who took out loans over the last 2 years either fixed it or fixed half of it as the narrative was rates are going up

  2. SweeperMEMBER

    “Powerful vested interests campaigned against us, through sections of the media itself, and they got what they wanted,” Mr Shorten said on Thursday.
    “But obviously we were up against corporate leviathans — a financial behemoth — spending unprecedented hundreds of millions of dollars [on] advertising, telling lies [and] spreading fear.”
    Mr Shorten also took aim at the media, parts of which he accused of not wanting a Labor government.”

    Yep the media did it. A more accurate take than the combined take of the journalist intelligence vacuum bubble as presented for the last 12 days. ALP aren’t neoliberal enough!! blah blah blah. No you idiots got Morrison elected. Simple as that.

    • Having lived in regional Queensland for many years, the media and the corporates had nothing much to do with it. Labor just doesn’t represent the working class anymore, and they represent the regional working class even less. They are a city progressive party. Labor needed a hard edged regional energy and industry policy, instead they were wedged on Adani as easy as shooting fish in a barrel.

      • SweeperMEMBER

        Look it doesn’t matter what Labors policies are.
        They credibly promised Queenslanders (with costings) cheaper housing, cheaper childcare, cheaper dental care, higher medicare rebate, better hospitals, lower taxes for lower income people all paid for by removing a shareholder welfare payment to the top 4% in Sydney and Melbourne and removing a housing speculator subsidy.

        Made no difference because the Courier Mail said pensioners were going to face a retiree tax and there would be a death tax and a housing tax and there would be a recession under Labor because they are bad economic managers because surplus.

      • They don’t want more welfare, they want jobs and opportunity. Welfare is a city progressive thing.

      • SweeperMEMBER

        So why did they vote to keep shareholder and housing speculator welfare, and based on LNP recent track record fewer jobs, lower wages and less opportunity?

      • “Welfare is a city progressive thing.”

        Really? So you’re saying there’s no reliance on welfare under various guises in the bush? With respect, that’s probably the silliest assertion I’ve seen on MB since all the yahoos were cleaned out.

      • For some stupid reason labor decided it wanted to be the greens party so ditched all their working class voters and chased inner city tryhards with no comprehension of what is going on in the real world. Ex labor voters went to PHON and the like and voila!

      • I’m not trying to be an apologist for the nuttiness here, just saying the way it is. Many of the miners/workers are actual or aspirational housing speculators (negative gearing is the great miner tax shelter). The franking rebate was just plain complex, I haven’t met an average joe that really understood what was going on there, so that was pretty open to a ‘new tax’ scare campaign that just sat with the other issues that were deemed to be anti-aspirational.

        The regions are really in a bad way, threatening any mining or industrial space without a rock solid regional industry/energy plan for transition was always going to be a disaster. This really is the Trump thing, the (ex)productive base is flexing its political muscle. It might not be entirely rational, and it might appear somewhat counter-productive, and it doesn’t always make sense, but these are the people that do most of the heavy lifting in the productive economy and they feel like they are being screwed, mainly because they are.

      • @triage. The regional cities are the new welfare zones, but that doesn’t mean they are happy about it.

      • SweeperMEMBER

        “They don’t want more welfare”

        And since when? in terms of federal fiscal relations the state has always been a dole bludger leaning on the other states.

        Decentralisation, remote communities, high state school enrolment levels, greater need for roads & transport, more natural disasters etc. etc. has always meant that Queensland has been a net drain on the Commonwealth ie. welfare bludger.

        Do Queenslanders know this? That their standard of living is paid for by the hard work of people down south? That they are first in queue at Centrelink? No because they read the Courier Mail and think they are the true hardworking, fair dinkum, salt of the earth, engine of the country, can do, “aspirational” types who get to veto the rest of the electorate every 3 years with their brain dead choices.

        In reality they are just not terrible intelligent. And read the Courier Mail

      • The main point is that most city people have absolutely no idea how tough it is to stick it out in the regions. Very high unemployment, very big problems with drugs/crime, very low wages, very low socioeconomic, very high welfare dependency etc etc. Monetary policy just feeds the city asset holders and fire workers, and crushes the regional productive economy.

      • SweeperMEMBER

        It’s not rational at all.
        The Queensland miners who voted for Palmer are probably the same ones who had $66M of their entitlements paid out by NSW and Vic taxpayers because Palmer didn’t pay them.
        That is just clueless sorry. Totally clueless. And if they don’t know how the franking system works, don’t vote. Just boycott the election and leave it to the adults down south.

      • SweeperMEMBER

        If a Melbourne suburbanite got the same level of government assistance as a regional Queenslander they might not actually have to spend 2 hrs in traffic everyday.

      • SweeperMEMBER

        that’s trade not fiscal equalisation. Yes Vic has a trade deficit but it’s still a net contributor to the Federation.

      • The huge rent-seeking populations of Sydney and Melbourne only exist because they leverage up the mineral and agricultural wealth of the nation, turn it into monetary policy and give it to themselves through the FIRE sector. The regions don’t really understand this, but they do understand that the city folks somehow get the nice end of the deal.

      • The point was originally not to debate the city regional thing, but to help you understand that you are just way way off the mark if you want to win over the regional voters. It has much less to do with media or corporate power, and much more to do with a genuine reconnection with the working class industrial base of the regions. We need a solid, rock solid, energy policy that crushes the energy price and feeds into the renewable tech and rebirths the regional productive economies. Until Labor do that they are whistling in the wind.

      • SweeperMEMBER

        Shifting the goal posts.
        Now you agree that Queenslanders love welfare they just don’t like rent-seeking (excl. welfare gaming)

      • SweeperMEMBER

        You’re just assuming they are going to vote for what is genuinely in their interest.
        When all evidence says the opposite. They vote based on ignorance and prejudice and the Courier Mail.
        Miners voting for Palmer. That’s just Turkeys voting for Christmas.

      • You can obsess over the nasty media etc till you’re blue in the face. They don’t want welfare, they want their jobs and industry (including unfashionable mines if that’s what it takes) and they don’t give two sh8ts what some too-smart lefty city folk think is best for them. While you do this, Canavan et al are laughing all the way.

        You just ignored the inconvenient truth about where all that city wealth comes from and are determined to blame the nasty right media. The media in the regions just reflects their opinions back at them, it doesn’t tell them anything. Believe your story if it makes you feel better but it aint what happened.

    • To put this in perspective we export about 120 million tonnes of thermal coal a year, and 80 million tonnes of LNG a year, all to be burned somewhere else in the world. And we can’t have an energy policy that lets us transition cheaply to renewables? Seriously, how stupid does labor think regional people are? Not that the LNP are much better on this but they only had to say we won’t close the mines.

    • Labor needs reminding that they created a few financial behemoths of their own when they privatised and deregulated the banks, and privatised the pension system.

      • @Freddy … And the same advisors to that group of pitchmen has been dominate since, regardless of political label, hence focusing on the political operatives lets the architects of the hook.

        @Sweeper … irrational fear you say, century of the self, atomtistic individualism, 24/7/365 full immersion advertising, market place of opinions, money is a vote, monetized reality, ideology over facts, education has become a user pays commodity, the market is the supreme computational device in determining information by the mass of rational agent “investors” [see Telstra] actions ….. because it – creates – wealth and goat approves ….

      • Side note … youngest daughter just quit a good paying job for a T1 national corporation after being asked to engage in unethical sales tactics and then got the usual treatment for not being malleable [tm].

        The wife and myself fully support her actions.