Macro Afternoon

Asian share markets are loving the possibility of the end of the US/China trade squabbles and the hope of more stimulus down a multitude of pipelines stretching from Europe, the US and China and back again.

Chinese share markets have seen the biggest gains, with the Shanghai Composite up exactly 1.5% and breaking the 2900 point barrier, currently at 2933 points. The Hang Seng Index is up even further, currently 2.2% higher to 28150 points. The daily chart is building on yesterdays breakout with a lot of upside potential if this sticks:

Japanese share markets are up strongly on the risk appetite with the Nikkei 225 reversing the previous gains to be up 1.7% at 21325 points. The USJDPY pair however has fallen back down to the low 108s after again failing to get anywhere near the two week long resistance overhead nearer the 109 handle:

The ASX200 is doing well, currently nearly 1% higher going into the close, now a new high at 6633 points. This is despite a higher Australian dollar overnight, but its not all good news as the Pacific Peso has been unable to clear weekly and daily resistance at the 68.80 level throughout this afternoons session:

S&P and Eurostoxx futures are up slightly with the four hourly chart of the S&P500 chart showing a desire to push higher after finally breaking through strong resistance at the psychologically important 2900 point level. Tonight’s FOMC meeting will be critical to support this bloated market:

The economic calendar will focus squarely on the FOMC meeting later tonight, but there’s also UK and Canadian CPI prints plus more central bank wonk speeches to digest.

Comments

  1. I rebalanced my Super last week to reduce my exposure to International and Australian equities, so a market boom was guaranteed to happen.

    • I did the exact opposite last week using VGS and IEM ETF charts as a technical guide to rotate back into international equities and emerging market equities. Been a good few days.

    • I confess this is why I don’t play with super. Need one chunk of assets that is quarantined from my own micromanaging tendencies!

      That said – LSWCHP, if you are only a few years off retirement (or hope to be, if I recall rightly) then having some of your super in lower risk assets than equities might be the right move anyway? (Not that it’s any of my business, sorry). Although anyway I suppose it depends on whether you are wanting to draw a lump sum, or keep just living for another 40 years…

      • Yep. I have enough Super to deliver a more than comfortable lifestyle quite easily right now. I’ve more than recovered from the market ructions last year, so with only a few years to go I felt I was at the point where I needed to start considering Return-Of-Capital rather more than Return-On-Capital. Like everyone I’d like to have more Super in retirement, but I’ve also seen a lot of stories about people who got smashed by the GFC just prior to retirement and ended up working into their 70’s. Phuq that for a joke. I don’t want to be like Suzi Quatro or Leonard Cohen and standing up in front of the youngsters when I’m well past my use-by date.

  2. Stone the Crows. My apologies for not getting back to you. I’m now back in the saddle & can meet sometime next week if that suits?

    • The Traveling Wilbur

      You had me at “My apologies”.

      Shall we say the usual place, around 7.30pm?
      I forget… is it my turn to bring flowers, or the lube?

      • Chaps are for pussies, ya gotta take the pricks in life unfortunately. Spurs & riding boots though……. Maybe if they’re roach killers to give a bit back.

    • Stone the Crows

      I am still here Nudge and all is good in our little corner of the world. Wife and I have settled in very well, have our small business set up at home and will have been here almost a year since moving down.

      Yes a beer at the Lakeview or one of the clubs would be great. We are directly opposite the TBCC. Contact details here: http://www.turabeachbeautyandrelax.com.au

      PS: You qualify for 10% off any treatment but the missus draws the line on Brazillians for blokes……sorry.

      • Well thanks for the beauty offer but TBH I think I’m beyond economical repair….. So it turns out we’re about 3 golf holes away from each other with the CC in the middle……. at least when I stagger home it’ll be downhill : ) I’ll call!

  3. Seize the Means of Production of Currency – Part 1

    Last week, Thomas Fazi and I had a response to a recent British attack on Modern Monetary Theory (MMT) published in The Tribune magazine (June 5, 2019) – For MMT. The article we were responding to – Against MMT – written by a former British Labour Party advisor, was not really about MMT at all, as you will see. Instead, it appeared to be an attempt to defend the Labour Party’s Fiscal Credibility Rule, that has been criticised for being a neoliberal concoction. Whenever, progressives use neoliberal frames, language or concepts, it turns out badly for them. In effect, there were two quite separate topics that needed to be discussed: (a) the misrepresentation of MMT; and (b) the issues pertaining to British Labour Party policy proposals. And, the Tribune only allowed 3,000 words, which made it difficult to cover the two topics in any depth. In this three-part series, you can read a longer version of our reply to the ‘Against MMT’ article, and, criticisms from the elements on the Left, generally, who think it is a smart tactic to talk like neoliberals and express fear of global capital markets. I split the parts up into more or less (but not quite) three equal chunks and will publish the remaining parts over the rest of this week.

    http://bilbo.economicoutlook.net/blog/?p=42513

    • End of the Big Short… Says the man who saw the fraud for what it was and bet against the housing market was now studying water as the next great crisis.

      But don’t worry Alan Jones has said Global Warning and climate science is nonsense.

      • Oh don’t go looking at the ground water issues with the mine here in Queensland would you, yep screwing with an already scarce resource so some coal [market divesting] can be shipped.

    • Gav, given Australia is the driest continent on the planet, it stands to reason we’d be a prime candidate for water supply issues. Mass population moves to coastal areas will gradually occur from the central and southern regions as water supplies dry up. The next move will be north as they will be the only areas still receiving some sort of rain fall.

      • Geezus Gav! that place is paradise. What are you waiting for. That’s the sort of place I’d get into debt for.

        I expect you’d want to figure out a bushfire plan although it doesn’t look too extreme on that count v

        Fantastic.

      • Yes I noticed the fire bunker bit, and so if you had the tanks full and a diesel pump i guess you could stay and defend against ember attack until the very last minute. Not that i really know what i’m talking about here.

        On the land size – i wondered if the owner wasn’t ‘t into horses they could pay someone else to run the adjistment businesss for them on the land?

      • @Gav. I saw that one myself today, or maybe yesterday. Know the area well, used to cycle around there several times per week.
        For me the killer is my cars. One Tree Hill Road is a lumpy, dusty (in summer) narrow winding dirt road. I just can’t imagine being happy knowing my nice old car will be filled with dust/mud every time I want to take it out.

    • This is Sydney in two years. These people are useless and worthless and have no loyalty to anything. They’ll be fcuking off in droves Real Soon Now.

  4. The Traveling Wilbur

    Mirabile dictu.

    25 hours in and Chris has failed to inadvertantly inflate the AUD with his ASX at the close commentary. Perhaps the poo is having its final flush after all?