Macro Afternoon

Following the ugly finish to last week on risk markets around the world, a new month and season hasn’t seen any fresh starts here in Asia as shares extend their slide across the region. Risks are mounting in every direction, with trade concerns doubling down on Trump’s Mexican tariffs and ongoing Brexit saga while slowing economic activity in South Korea and Japan are causing even more uncertainty.

The Shanghai Composite is set to close again below the critical 2900 point level, falling 0.4%, while the Hang Seng Index is down nearly 0.3% to 26829 points, still unable to arrest the recent decline. The daily chart had been showing a deceleration pattern with a target at the 27000 point level but poor sentiment is weighing too much on this risky market:

S&P and Eurostoxx futures are down 0.7% or so going into the European session with the four hourly chart of the S&P500 chart suggesting another new daily low to start the new month, still well below key terminal support level at 2800 points. This level continues to signal a major correction as the completion of a very bearish head and shoulders pattern on the longer term charts:

Japanese share markets are down the most, with the Nikkei 225 1% lower at 20410 points, almost ready to tackle the key terminal and psychological support level at 20000. There is still no bottom in the USJDPY pair with a fall back to the 108 handle during today’s session after a big fall on Friday night, as overhead resistance and risk-off avoidance is sending Mrs Watanabe to the domestic safe haven currency:

Australian stocks finally stepped in line with their Asian brethren, the ASX200 falling nearly 1.2% lower at 6320, finishing well below previous support at 6400 points. The Australian dollar continues its strange blip higher despite the poor sentiment, getting above overhead resistance at 69.20 as all traders position for tomorrows RBA meeting, where a cut is expected:

The economic calendar starts the week and monthly calendar with a big print tonight – US ISM Manufacturing.

Comments

    • Pretty obvious they’ve cucked Scomo. He’s got no option but to sit there, pull down his pants and smile.

      • Get down to the harbour tonight with your high powered green or blue laser pointer, share the light magic of Sydney’s Vivd onto the bridge of these ships, the same way the PLA Navy militia did on RAN personnel in the Sth China Sea. Luckily I purchased mine on Ebay just before the import ban came in (actually the announcement of the import ban was the motivating factor of my purchases), as long as you don’t aim it at the NSW police or any airplane you should be okay. I think I’ll be down there again in the morning with Republic of China flags, oversized portart of Generalissimo Chiang Kai-shek and loudly playing ROC military music from Mrs Macquaries chair, I want to get a mention in the Global Times.

    • Got something against a freedom flotilla mate … not to mention the local businesses revenue ….

    • The reality is they could take Sydney tonight with the men and equipment on those ships (there could also easily be 100,000 troops already in aus). No one could/would do anything. As long as people are allowed to continue with their lives there’s be no resistance.

      • Yeh ok. They’d have Sydney, and Sydney would have dive sites.

        Does that make you feel better?

      • C.M.BurnsMEMBER

        If the invading PRC’s first press release promised that: house prices would go up, NG would be retained, franking credits for everyone and cheaper power prices cause they were nationalizing Adani, they would win over QLD, TAS, the bogan western suburbs and 90% of people over 65. That’s what amoral wh0res this country has become.

      • The way I see it the Chinese have already taken Sydney. Let them have it. Time to move on to better pastures.

    • Just think of it as a Chinese-owned apartment block with water views, close to amenities and very good wifi.

    • Trump would not be happy about this crass display of public affection toward China. Thankfully his thimble sized brain is being distracted in the UK otherwise it would be lock in tariffs on aluminium.

  1. yeborskyMEMBER

    Big family reunions in Chatswoo coming up! Amid celebrations of Tiananmen massacre anniversary, no doubt. Defection anyone?

  2. *CHINA TO WARN ON RISK OF STUDYING IN U.S.: GLOBAL TIMES’ HU….this will flow onto US allies…Aust property mkt gone…

    • Wrong. The US is #1 in terms of numbers even a small proportion pushed here is a BIG jump in our numbers.
      less Chinese students to other markets means more here.

      • Wrong, i totally understand that but China as i said, will make it difficult to ALL US allies…that includes students to Australia…if it happens in US they will restrict everywhere in order to put pressure on the world to kick up a stink and try and lobby the US to stop…think outside the box, not simplistically.

    • Why do you think Australian universities are spending big time $$$ on marketing campaigns directed towards potential customers (students) from the Subcontinent?

    • Opportunity to study overseas is now an embedded expectation amongst a big chunk of Chinese society. The government is careful not to curtail that overall ( the Chinese f*ing riot over access to education). This is why the CCP, which doesn’t like international education, allows it to happen and instead invests so much in controlling Chinese students when they are here.

      There are 4 major English speaking o/s markets for Chinese students. What you are suggesting is that Chinese student flows will be restricted to ALL of them. This would require the Chinese government to ban overseas study for a lot of its students. It will not do this. China will divert students from one market to another but it won’t cut off access to English speaking overseas education.

      Less Chinese students to the US and Canada mean more here. Anything else is wishful thinking.

      • I think you are underestimating the ability of the CCP to fire up the patriotic fervor and have studying overseas become seen as a negative, unpatriotic act. The ’embedded expectation’ was based on future employment prospects being boosted by studying overseas. If young Chinese start to see a stint in US/AU/other universities as a negative on their future employment prospects within China, things could switch very quickly.

        Time will tell.

      • C.M.BurnsMEMBER

        Which pacific and Indian nations have bent over the furthest wrt One Belt One Road ? Fiji ? PNG ? Some other resource rich, third world African nations ? I’m sure they all have good universities with perfectly supplicant governments.

        In all seriousness, I’d bet the top 1-2 Uni’s in most nations would deliver a better Higher Ed outcome than the visa factories that ours have become.

  3. Or this visit was arranged months ago, when a labour
    Election victory was considered a certainty, perfectly timed to embarrass the new government.

    • I dare say given the planing, Sydney property developers with Mainland Chinese connections and the casino will be running courtesy shuttle buses too and from Garden Island into the city to shift over 700 PLA Navy personnel. Mortgage brokers, banks and migration agents will erect stalls outside the main gate. Messrs Robb, Carr and Keating will be hired as greeters and spruikers.

      • And the influx of over 700 PLA personnel is sure to increase prices at Asian massage shops in Sydney for the next 4 days. Reusa won’t be happy.

  4. New Zealand’s fielding has been very good leading into the world cup. It didn’t drop in their first game. Look at how the pace bowlers dive at the crisp drives that are hit back pass them. They may not get it but they are going to do everything possible to try to.
    https://youtu.be/rTDbt-TE1EI

  5. The Traveling Wilbur

    Chicken entrails update (ASX): Don’t buy meow.

    Chicken entrails update (Bonds et al): Please Sir, may I have some moar?

    • blacktwin997MEMBER

      It’s like these latest generations of vibrant scrotes aren’t even trying anymore, talk about underwhelming

  6. Mr RobertsMEMBER

    I’m at the point of capitulating. Take any rational monetary theory and piss on it.Take Peachys advice and get in on the upswing. They are going to print money, mmt, qe infinity etc. Listen To Peachy, and get richy.

    • Sigh … printing money [tm] is a commodity money meme forwarded by those pushing an ideological narrative.

      MMT is not engaging in any such activities, just laying out how state currency issuers function, and yes its bastardized – part old and new – E.g. that’s the political part where influence dictates distribution.

    • If they manage to sustain bubble prices, it will be the first time in history.

      I’ve thought about buying a house in a less desirable area for about half of a nicer area or house would cost me. So about $400k as a hedge against stupidity, but I would also be living rent free then. Instead of paying rent, save it towards the next house. Trade up etc..

      • Pretty much what we decided to do last Sept Gav – got sick of waiting on the unknowable (depth & duration of any downturn) & aimed lower & kept the change. Part of the thinking was we can’t lose if we don’t have to crystallize any loss. Taking the reins & locking in a decision has taken a layer of stress off the table, particularly for my Mrs (& therefore me) – but it’s also come at that opportunity cost…… If I only had to consider myself I’d likely have moved to a more suitable rental, or bought a bus, & invested aggressively to live off the savings….. which could’ve also blown up in my face…… Horses for courses…… you’re only right in hindsight,…..

      • Thanks for the insight Colin. I saw a house in Frankston Victoria for $400k. On 500sqm with space for 3 cars (double garage + carport). I figure at that price I don’t pay any rent, but also have a big amount of money ready to invest in whatever opportunity I like.

        The house is in no way aspirational, but far better than the shyte box we rent in Sydney and no greedy landlord or self centered real estate agents to put up with. And I could actually improve it and spend money fixing things without the need to ask for permission.