Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Asian share markets have started the week on a mixed note, continuing the confused Friday session as risk markets await the latest from the tanker attacks in the Gulf and the upcoming FOMC Meeting on Wednesday.

Chinese share markets rebounded following their poor showing on Friday with the Shanghai Composite lifting nearly 0.3%, almost back above the 2900 point barrier, while the Hang Seng Index stopped its retreat, bouncing 0.7% higher to 27332 points. The daily chart is stabilising somewhat here in the wake of the huge protests outside the exchange, but caution still reigns:

Japanese share markets put in more scratch sessions, with the Nikkei 225 failing to change at all, closing 0.04% higher to close at 21124 points. This is despite a weaker Yen throughout todays’s session with the USJDPY pair lifting above the mid 108’s and ready to tackle two week long resistance overhead nearer the 109 handle:

The ASX200 slid back today despite a positive trend in back stocks, with industrials pushing the bourse 0.3% lower to 6530 points. The Australian dollar remains under the 69 handle following its big selloff on Friday night, gapping up only slightly before melting in the afternoon session, hovering just above the monthly/yearly lows:

S&P and Eurostoxx futures are up about 0.2 to 0.3% going into the European open with the four hourly chart of the S&P500 chart wanting to get above strong resistance at the psychologically important 2900 point level going into this weeks FOMC meeting where everyone is hoping for more puts!

The economic calendar starts the week slowly with some Treasury auctions, followed by a speech by Super Mario in Portugal.

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  1. The Traveling Wilbur

    I love Google.

    Mario is depicted as a portly plumber who lives in the fictional land of the Mushroom Kingdom with Luigi, his younger, taller brother. In the television series and film, Mario and Luigi are originally from Brooklyn, New York.

    EP is portrayed on MB as a portly plumber who lives in the not-so-fictional land of the Magic Mushrooms with Jacko, his younger, shorter offsider. In the television series and film, Ermo and Jacko are originally from Bunnings, Trades Only.

    • Wilbs – thanks for your post late Friday on MB’s investment calls. Yes – bit of ill luck picking THAT pair of calls to go by. I also took the ASX-crash call seriously and sold an index fund … ASX kept going up but what I bought with the money (on no-one’s advice) then outperformed the index – call it luck – so no regret despite being “wrong”. (Doesn’t usually happen).

      As for a house… it’s a question of
      – have to wait 3-6 months to clear up a job situation
      – but if all goes “well” I will then have to buy… unless a crash is on clearly enough for no-one to deny… in which case obviously better to wait, get more house for the money…
      – but it had better be the right house fkn.

      • The Traveling Wilbur

        I can already imagine the subtext of conversations behind all that. I’m sure “If you mention that bloody MicroBusiness site one more time…” was in there somewhere. LOL.

        Good luck with the job sitch. And looking for an unsuitable house. 😉

        But hey, give in and get one anyway. You can always blame the Mrs then if it works out like MB said. Who knows when you might need that card?! 😁

    • I’m not silly enough to mention MB – but if it’s in the mainstream media it makes the cut. April was good. Just need to keep her away from the papers for a few months now though…! 😉

      But yeah. Might have all choice removed shortly!

  2. BrentonMEMBER

    The other major piece of our economic health index looks at the likelihood of debt being a support or detriment to future growth. Australia’s indebtedness position is worse than other countries, ranked 19 out of the 20 countries we look at. The country has very little room to lever up in the future, with a total debt burden of around 355% of GDP, compared to the global average of 200-250%. – Ray Dalio, 2017

    Yeah, I reckon you’re right, Mr Dalio. We have a mountain of unproductive debt (speculative housing bubble) and we’re at the end of our long-term rate cutting regime. I struggle to see why the bulls are so happy that the RBA is about use the last of its 125 basis points trying to stop the end of cycle deleveraging/asset crash. Seems to me like we’re finally in the end game.

      • BrentonMEMBER

        That’s not how QE works. It is tantamount to giving more stock to a business that has no customers.

        If 525 basis points of cuts was unable to prevent US households from delevering, why do you imagine 150 basis points + QE will work instead?

    • Parasitoid: an organism that lives in close association with its host and at the host’s expense, and which sooner or later kills it.

  3. … CHINA …

    Singapore exports suffer biggest fall in three years as exposure to Chinese economy, US trade war bites … South China Morning Post

    Singapore’s Grim Export Numbers Add to Economy’s Warning Signs … Bloomberg

    China asks state-owned ‘national champions’ to help ‘stabilise’ economy, boost profits by 9 per cent in 2019

  4. I went to some open houses and an auction this weekend gone. In my area (N.E. Melborne green belt). I didn’t get any sense of desperation from agents, but they were very interested to know what I thought the value of the property was. Stalemate.
    However, there were no people at all of the far east persuasion inspecting or bidding. It was all young aspirational couples. This is very different from 9 months ago.

    • Not that asian couples can’t be aspirational, you know…just not in the way we understand here at MB

    • Arthur I’ve been looking in Melbourne’s green belt (North East) for quite some time, was there a lot of vibrants buying there? I always though it was locals, but I am not there in person to see myself.

      I have noticed homes in the area are not going under offer like they were 12 months ago. It’s very slow.

      • Hi Gav. It was very localised. Templestowe, Bulleen, Doncaster, Rosanna etc. had lots of vibrant asian buyers last year. Further out, Eltham, Diamond Creek, Hurstbridge etc not much vibrancy at all. I was saying above that in the inner N.E. such as the first list of suburbs, I saw a change. Hope this clarifies my comment

      • Thanks, I wasn’t looking at Templestowe, Rosanna so much as it was a bit close to the city and the prices were out of this world expensive, coupled with smaller blocks. I was looking more towards, Wattle Glen, Cottles Bridge, Kangaroo Ground, St Andrews, Eltham, Greensborough.

        But I suspect as with all bubble prices people were being pushed further out, how else do you explain people paying $1M in St Andrews?

        I guess Kew is not far from Templestowe and that would definitely attract the Chinese bid.

      • Hey Gav, I’ve shot dozens of properties in those areas. Not a single vibrant in sight. An easy way to tell it if there is a lot of vibrants buying in an area is to look at how many vibrant real estate agents there are in that area.

      • haha, Shawn thanks.
        That’s a good point, I’ve noticed in places like Dandenong there is lot of vibrants, but also Box Hill all the agents were Chinese!

      • There is heaps of vibrancy in Doncaster. A lot of sky slums have been built in Doncaster over the last 5 years.

        Instead of building sky slums where the train stations are, the fake Greens are building sky slums in Doncaster (which has never had a train station!)

        A lot of sky slums are under construction in Glen Waverley now – but at least it has a train station.

      • @Burb. I just had a quick look and yes, it will give you exposure to international treasury bonds. I would just note that from my quick reading, it is hedged into AU$ and therefore I don’t think it will give you the compounded advantage of exchange rate plus interest (if we assume the AU will continue somewhat lower for this H2). This is just my initial reading.

  5. Real estate company in Melb just sacked more of its sales staff today. A boom of a different kind.

  6. 🤣🤣🤣

    The wage stealing bosses try to get the high court to remove the state-based luxury car taxes:

    6 hous ago

    the stamp duty on cars priced over $100,000 would increase to seven per cent of their total value. On cars over $150,000 the stamp duty will increase to nine per cent of their total value.

    The move isn’t without precedent. Queensland introduced similar measures last year and the NSW opposition also pledged a separate LCT levy before ultimately losing out in this year’s election.

    Comment under the article:

    “It’s um… give me just one moment… this is a blatant violation of the constitution … What section?… It’s just the vibe of the thing”

    Just goes to show that the states should run Australia instead of the feds. NSW can have its anti-poor governments (Mike Baird and Gladys) while Victoria, Queensland, SA, can have pro-poor policies that used to exist before PM Howard took the tax laws and wage laws away from the states and centralised them with the psychopathic feds. Strawberry flavoured milk in Victoria used to be regarded as a luxury item and was taxed at a much higher rate than normal milk. 20% perhaps? ACT has land tax now. New York State has a mansion tax and Manhattan is slated to get a congestion charge soon. Imagine if negative gearing was determined by the states rather than the feds.

  7. If anybody is looking for a Black Swan, Kericho hospital in Kenya is testing a woman for Ebola like symptoms. This is hundreds of km from the DRC hot zone. If she does have it, that would be 3 countries with Ebola outbreaks. And the hospital is near an airport.

    This is major sphincter pucker stuff. Might be time to check your supplies of food, water and ammunition.

  8. CanuckDownUnder

    More vibrancy in the AFL courtesy of Sunday’s Giants-Roos match in Tassie. Footage has come out of a security guard attempting to come onto the field to break up a player scuffle!