Macro Afternoon

While all local eyes were on the RBA, which made its first move in interest rates in three years, the region was focused on macro issues particularly trade with all the action in bond markets as traders remain jittery. The USD is still weak after the recent reversal with the Yuan fix remaining steady, the Euro will come under pressure this evening with the latest CPI print.

The Shanghai Composite is set to again close below the critical 2900 point support level, falling nearly 1% to 2860, while the Hang Seng Index is down nearly 0.6% to 26729 points, still unable to arrest the recent decline, making another daily low. 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 market:

S&P and Eurostoxx futures are down 0.4% or so going into the European session with the four hourly chart of the S&P500 chart suggesting a possible short term bottom here at the 2750 point level, but still remaining well below key terminal support 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 and would require a rally well above the downtrend line:

Japanese share markets are holding on the best, with the Nikkei 225 putting in a scratch session to finish at 20408 points, almost ready to tackle the key terminal and psychological support level at 20000. There seems to be no bottom in the USJDPY pair with a fall below the 108 handle during today’s session, as risk-off avoidance and the shifting of USD strength is sending Mrs Watanabe to the domestic safe haven currency:

Australian stocks did the best in the region by advancing slightly, helped along by bank stocks that rallied in the wake of the RBA cut. The ASX200 eventually closed nearly 0.2% higher at 6332 points, still below previous support at 6400 points but holding on in this small dip. The Australian dollar reacted somewhat to the upside on the cut news, almost pushing through the 70 handle before retracing, but has again lifted going into the London session where momentum remains overbought:

The economic calendar ramps up again tonight with two events to keep an eye on, first its the EZ wide CPI print for May, then Fed chief Powell will be talking at a conference and may respond to Bullard’s comments from last night.

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Comments

      • Mining BoganMEMBER

        Pfft…I made myself a target long ago. I’ll be in the folder marked random nutter, investigated and dismissed.

        It would be different if I aired my thoughts somewhere that had more than 58 consumers though…

      • The Traveling Wilbur

        @MB Massively obvious setup. Still literally LOLed anyway. +58.

        Or +7 if you’re only counting paid up members.

    • The AFP has been officially recruiting and promoting officers on the basis of what sex and “cultural background” the candidate is as foremost importance over skills, suitability, qualifications etc. for several years now.

      • C.M.BurnsMEMBER

        I’m pretty sure straight, white, racist and homophobia have been core recruiting standards for all Australian police forces since time immemorial

    • proofreadersMEMBER

      Yep, indeed – also, brings back fond memories of the coalition of the willing? And wasn’t that a dream of sorts?

  1. BrentonMEMBER

    A little surprised by how muted the ASX response was to the rate cut. Bad news is bad news after all?

    • Nah. Scomo Miracle and all that.

      Separately China announces milk powder policy, all the Aus milk producer shares crater… we are an exporting nation and bit by bit… and yet the AUD is unmoved – how blind / myopic are we?!

    • Self answer – about 7.30 pm – he said more rate cuts “not unreasonable” – AUD went up!

      My question: what does it all mean?
      Answer: what do you call nasal intercourse?
      (F#ck nose).

    • Seems to have been a sell off of USD after poor manufacturing data. It also likely increased pricing in for a US rate cut on the back of that data which has perhaps today drowned out whatever the little RBA is tinkering around with re AUD.

    • That fvcken idiot Erik Ballbag at the SMH is banging on about how some vibrant can now afford to buy a house in Skid-a-knee now interest rates have dropped 25bp’s. Really? If the cvnt couldn’t afford with current rates he shouldn’t be buying a house full stop!

    • Ronin8317MEMBER

      It shows that Australian voters don’t care if the people they elect is completely corrupt.

      • Possibly, or it indicates that our social institutions have now been so degraded by extreme growth neoliberalism that individual survival outranks any thought that collective benefits may be possible. If the big Australia and the gross inequality and the futility of community goals that accompany it are coming regardless, then it makes sense to favour policies that appear to maximise personal gain?

      • I wouldn’t say don’t care, they don’t care enough to find out more when MAFS is on. The dumbing down of Australia is complete.

  2. proofreadersMEMBER

    “That brings me to the final question: what about the savers, have we forgotten about them?”

    Captain Phil’s last and effectively rhetorical question in his speech tonight. The answer is essentially no, because savers have been now designated the ultimate in collateral damage. Keep some pennies aside for lubricant.

    • Phuq Ramadan.

      If only we could persuade rich Chinamen that eating muslims would make their dicks bigger. Muslims would be an endangered species before you could say “self detonation”.

      • LMFAO. Shouldn’t be too hard..

        On that topic a friend of mine started a business in Afghanistan. He’s making land-mines that look like prayer mats. It’s doing well. He says prophets are through the roof! 😀