Macro Afternoon

See the latest Australian dollar analysis here:

Australian dollar bid as virus fixed!

Asian share markets are literally treading water while currencies are the only movers as traders try to find their feet at the start of the trading week. There was a  fly in the ointment for Aussie short sellers – the RBA – as Governor Lowe’s speech put a little boost under the beleaguered currency.

Chinese share markets are unchanged with the Shanghai Composite up exactly 1 point, still just above the 3000 point barrier while the Hang Seng Index has advanced 9 points, basically going nowhere to be at 28482 points. The daily chart is trying to building last weeks breakout with a lot of upside potential if the recent session highs nearer 28600 are broken:

Japanese share markets are up only slightly higher with the Nikkei 225 closing 0.13% higher at 21285 points. This is despite a relatively strong USJDPY pair which has gapped up a little on the usual Monday morning thin trade, but remains depressed here in the mid 107s:

The ASX200 is the best in the region, closing nearly a quarter of a percent higher at 6665 points, barreling in on new record highs again. This is despite the higher Australian dollar goosed by Governor Lower with the Pacific Peso pushing up above it nascent uptrend to the mid 69s and ready to break higher, although momentum is somewhat overbought:

S&P and Eurostoxx futures are flat 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 previously. This is a classic setup for another leg up higher:

The economic calendar starts the week with the German IFO survey plus the Dallas Fed manufacturing activity report, both interesting to weigh up against Friday night’s PMI prints.

Latest posts by Chris Becker (see all)


  1. BrentonMEMBER

    The last, and most important component, is the yield curve, or the schedule of bond yields based on maturity dates. His focus is on the five-year Treasury bond yield, which now is lower than the yield on three-month Treasury bill. According to Harvey’s research, when this inversion — short-term rates being higher than long-term rates — lasts for a full quarter, or 90 days, then a recession will occur in 12 to 18 months.

    Inversion occurred on March 7 and earlier this month we crossed the 90-day threshold. Thus, all four of the conditions for a future recession in Harvey’s model now have been met.

    Time for risk on. I’m sure I can get back out… said every pundit anywhere.

    • A recent guest on Macrovoices (I forgot who it was) had a contrarian view on the inverted yield curve presumption. Historically, yield inversion coincided with high inflation which forced the central banks’ hand. i.e. they are not going to cut when inflation is still high. This time however, inflation is “relatively low” which means central banks can cut as soon as they perceive a recession risk.

      • BrentonMEMBER

        This time is probably not different.

        It is not inflation driving the inversion, at least not directly.

        The Fed hikes because the economy is booming (overheating). Bond market is healthy & happy to buy at the short end.


        The bond market sees that the Fed has hiked too much; financial conditions are tightening & the economy is starting to show strain.

        Predicting a Fed policy reversal in the face of a slowdown (recession), the bond market begins to move from the short end of the curve, buying longer dated bonds (driving the longer dated yields lower than the short end).

        See image. Note that it is like someone has pushed down with their fist upon the belly of the curve (5 year etc), pushing them lower than the short end (3 month etc)

      • The point is that historically we have shifted from high inflation to recession. This time there is no high inflation. The central banks can cut any time they please without risking hyperinflation.

        That was the argument put forward by the guest. I don’t have the stats to prove for or against. Don’t shoot the messenger.

      • BrentonMEMBER

        Wasn’t having a go. Just bouncing thoughts about.

        It’s true that rate hikes are traditionally due to inflation, but there’s not really much point in arguing whether there was enough inflation to justify the hiking cycle, as it occurred either way.

        Inflation does not cause the inversion. It is bond traders/investors looking to trade ahead of Fed cuts. The byproduct is that when they collectively do so, it almost always predicts recession; ie a whole market is seeing the same signals that will cause the Fed to cut, which are pre-recessionary by nature.

  2. Ronin8317MEMBER

    Why does it cost 50 million dollars to establish a degree? It is a blatant bribe. That being said, Ramsay Center should lobby the government to add ‘Western civilization specialist’ to the list of occupation for immigration visa, then every university would be falling over backward to offer the course to international students.

    It is all about $$$$ now.

    • Masterstroke… if that were the case then it would be racist to oppose the degree altogether.

      Now that I think of it, it’s weird that the same conservatives who think anyone who didn’t study STEM can rot, are so deadset behind what is basically an unemployable arts degree, with virtue signalling mixed in.

    • Why are governments around the world backstopping badly behaved banks? Isn’t that what legislation and regulatory bodies are supposed to exist for? To make sure the banks behave themselves? But no, we let them run amok blowing asset bubbles, coming up with dodgy investment schemes, overcharging and generally being parasites and then governments turn around and give them cover to continue pillaging until they blow up, which the taxpayer then pays for. Fvcking unbelievable!

      • Legislation and regulatory bodies are there to protect company positions and to deter competition. It has nothing to do with stopping bad practices etc.. in fact these “bad” practices are encouraged by the government itself! Just ask the property PM he said it on TV.

  3. So they cancelled Foloau’s gofundme. Not that I agree a millionaire like himself should resort to gofundme for this but the amount of money he collected in such a short time shows that enough people think the decision to sack him was wrong. What’s unbelievable is that these big corporations are acting “in our best interests” my arse and seem to take it on themselves to determine “real news”, “fake” usually real news, privacy terms, usage terms etc. as it suits someones agenda.

    • yep – business opportunity to set up a rival go fund me which allows christians and other deplorables to raise money off each other.

      this whole folau affair reminds me of the crucible – fitzy and liz ellis wouldn’t be out of place in salem getting the fires ready.

      • We need a rival to almost every online big corporation, similar to how MB is a good rival to the mainstream news outlets. In the meantime I’m trying to boycott as much as possible.

      • C.M.BurnsMEMBER

        religion already has a rival entity to get donations from people for one cause and then spend it on vanity projects, OTT salaries and other undertakings that run against their own faith’s teachings: it’s called church

    • Shouldn’t be allowed to cancel it. I disagree with giving him money, but I agree with free speech. Even if I disagree with people who believe in an invisible sky daddy.

      Do you recall when Visa / PayPal etc.. were cancelling money transfers to Wikileaks etc..? People were not happy that large corporations could dictate where their money was sent (yet somehow the likes of Isis can receive payment?)..

      Anyway this is why crypto was invented to decentralise payment systems and banking and break the control they have over our society.

      Stuff like this just makes me want to look at crypto more closely. To hell with central bank / Goverment controlled fiat.

      • C.M.BurnsMEMBER

        this is not a free speech issue. Folau is still perfectly and legally entitled to espouse his particularly vile and toxic opinions as he sees fit.

        This was originally a matter of contract law and Folau not believing that the terms of his contract, which he willingly and voluntarily entered into, should actually apply to him. And it’s now also a matter of a private company (gofundme) exercising it’s legal right to choose who it provides a service to.

      • C.M.Burns that’s right. All of the supermarkets should be allowed to refuse to sell him food. All of the gas stations should refuse to sell him petrol. The toll road operators should prevent him being on the roads. Private companies don’t you know.

      • C.M.BurnsMEMBER

        that’s a fancy looking strawman you just built there. Have you used it before ? And did anyone agree with it when you did ?

      • Gav …

        I share Burns views on legal grounds and not some vague misinformed ideological optics, furthermore central banks have had basically 3 different interrelations since inception, currently late stage quasi monetarist. The centralization of administration is based on that pretense and not intrinsic to central bank operations in of themselves, add on political path dependency generated over decades of neoliberalism and their you go.

        Please do read up on the free banking period, as Luke said – it does not turn out like you think it will.

      • Have you seen Folau’s contract too, C.M. Burns? I am intrigued by all the people who have read his contract and even more intrigued that given the apparent clear breach of it he was only pulled up for breaching the player code of conduct. I am also baffled that the lawyers seem to think he has a case given his clear breach.

      • @Burns I agree to some extent, but when large companies have monopoly control over certain spaces it becomes even more difficult. For example Facebook, Google, Twitter etc.. recently Steven Crowder was de-monetized on YouTube.

        The crime?? Apparently hate speech, but who makes that call? A bunch of left leaning silicone valley elites who view anyone with an opposing view as a deplorable. The problem is they selectively apply their morales. They are inconsistent. They also have massive political sway and can destroy business overnight with the stroke of a pen.

        Mr Falou has run afoul of a certain political ideslogy and progressive thought police. Why does GoFundMe care about this? Why are they getting involved and taking sides here?

        They should remain neutral. In my opinion. If people want to send this guy money, let them I say.

      • C.M.BurnsMEMBER

        Olaf, of course I haven’t. But you knew that. The way that contracts are structured is to reference common documents, so that changes to terms – in this case to the player code of conduct – can be applied once and they flow through to all other contracts and documents that are referencing the code of conduct.

        So the term that he breached was in the RA code of conduct (“high-level breach of RA’s code of conduct” – per the official announcement), but the CoC was referenced in his contract, so a breach in the former meant a breach of the latter. And also recall that this was the second time that he had breached the CoC.

        And you’re kidding if you think lawyers won’t argue an indefensible position so as to obtain a better negotiated position for their client.

      • Ronin8317MEMBER

        For Rugby Australia, it’s a business decision. Alan Joyce is the CEO of Qantas after all. Similarly, if you write an app that promotes anti-gay views, it won’t be listed on the Apple Store because of Tim Cook.

      • “And it’s now also a matter of a private company (gofundme) exercising it’s legal right to choose who it provides a service to.”

        So, if a private company decides it doesn’t want to sell to blacks, or homosexuals, or muslims – you’d be fine with that too?

        A true libertarian

      • C.M.BurnsMEMBER

        these mindless strawmen arguments are becoming tiresome.

        Of course that can’t happen, because it’s against the law and therefore illegal for companies to discriminate against an individual based on ethnicity, race or sexual orientation. They also can’t discriminate on religion.

        His religious belief is not why Folau was removed from the GoFundMe platform. It’s also not why his contract was terminated for breach, but I’ve covered that above. From the GFM Press Release:

        “”Today we will be closing Israel Folau’s campaign and issuing full refunds to all donors. After a routine period of evaluation, we have concluded that this campaign violates our terms of service,”

        GoFundMe’s fine print says the crowdfunding site cannot be used for “campaigns we deem, in our sole discretion, to be in support of, or for the legal defense of alleged crimes associated with hate, violence, harassment, bullying, discrimination, terrorism, or intolerance of any kind relating to race, ethnicity, national origin, religious affiliation, sexual orientation or sex.

        That is a legally fair and enforceable position.

      • Coming just look at the gofundme code of conduct for use, additionally one has to consider the amount of people contacting gofundme from a negative perspective about this case.

        GoFundMe’s fine print says the crowdfunding site cannot be used for “campaigns we deem, in our sole discretion, to be in support of, or for the legal defense of alleged crimes associated with hate, violence, harassment, bullying, discrimination, terrorism, or intolerance of any kind relating to race, ethnicity, national origin, religious affiliation, sexual orientation or sex.”

      • drsmithyMEMBER

        Shouldn’t be allowed to cancel it.

        Why ? In what circumstances *would* it be OK ?

        Mr Falou has run afoul of a certain political ideslogy and progressive thought police.

        Indeed. The ideology that it’s OK to be gay. Can we conclude from your strong opposition to this ideology that you disagree ?

    • C.M.BurnsMEMBER

      do you think Bunnings stock Arab Barometers ? If not, I wonder where you can pick one up.

    • So let’s see..
      1. Support for Honorable killings.
      2. No supports for the gays.
      3. Men make final decisions.
      4. Emmigration for economic reasons (poor Europe)..
      5. Israel is the greatest threat to the region…
      6. They don’t like Trump despite him not yet invading anyone.

      Makes sense.

  4. CanuckDownUnder

    This Four Corners special on Australia’s extinction crisis is going to explain that the planeloads of people crush loading our shores is playing a big part, right?

      • True, but habitat destruction due to urban sprawl plays a big part too. Why do we have so much sprawl? Population growth.

      • desmodromicMEMBER

        Skip, maybe so but that doesn’t change the fact that the problem is particularly acute in Australia . Australian’s have ‘big back yard syndrome’ that assumes that messing things up here doesn’t matter so much because here is more over there. So-called offsets are a product of that outlook. Whatever the intent it hasn’t worked. Population pressures, land clearing and cats have taken huge toll.

      • drsmithyMEMBER

        True, but habitat destruction due to urban sprawl plays a big part too. Why do we have so much sprawl? Population growth.

        Habitat destruction due to urban sprawl – along with land use in general – is insignificant. A fraction of a percent.

        A quarter acre block for every household in the country is equivalent to about 1/8 of Tasmania. You could probably move ca. 90% of the population into the ACT and they wouldn’t be any worse off in terms of “space”.