Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Hope is not a good enough driver for risk markets, with Friday nights’ US unemployment print dashing expectations of sooner and larger rate cuts from the Federal Reserve. After a sharp fall on Friday, undollar assets have come back slightly in Asian trade with gold back above $1400USD per ounce while Yen was bought on the safe haven trade.

The Shanghai Composite has been flummoxed by the NFP, but also suggestions that the trade war with the US if far from over, falling more than 2% to be at 2932 points going into the close.  The Hang Seng Index is also putting in a big selloff, falling 1.8% to 28257 points, breaking well below the previous set of highs at 28500:

Japanese share markets are also lower as safe haven buyers turn to Yen instead with the Nikkei 225 closing 1% lower at 21534 points.  The USJDPY pair has retraced after its too far/too fast move on Friday night, falling to the 108.30 level as Yen buying accelerates:

The ASX200 was pulled back strongly from its previous record highs with a 1.2% loss to 6672 points, not helped at all by the falling Australian dollar on Friday night. The Aussie has bounced a little throughout the session to be a whisker under the 70 handle but is looking weak here going into the European session:

S&P and Eurostoxx futures are down at least 0.4% or so with the S&P500 four hourly chart showing a market in dip mode that could translate to a wider fall back to the previous highs at the 2950 point level:

The economic calendar has a few interesting releases tonight, namely the German trade balance plus industrial production numbers for May, while in the US its all eyes on the latest Treasury auctions as the world’s biggest market – bonds – remains in a yield inversion.

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  1. I posted this on an earlier story, thought it was interesting enough to post here for more exposure:

    Just went to my local IGA (Cannon Hill, Brisbane) and with no explanation it’s all shuttered up. Only sign on door was from property management saying DO NOT ATTEMPT TO ENTER, could still see fridges and fittings in place and website says it’s open….

    Owner and workers were all from the subcontinent, perhaps rorting the workers wasn’t enough to keep up with exorbitant rent and owner did a runner?! Who knows, definitely interesting though…..

    • My suspicion is that stopping wage ripoffs has made a lot of convenience-type businesses untenable, including restaurants.

    • The Traveling Wilbur

      Did you knot no?

      In Queensland, and in Brisbane especially, I G A stands for Immigrants Gone Away. When that happens, shops close left right and centre. See Indooropillly.

      Even the Korean city groceries are struggling.

      But I’m sure the tax-refunds all those workers are about to get paid out will fix… oh… wait.

    • My local IGA (Carina Heights, Brisbane) all young Australians. Very pleasant they are too. Great selection of pies.

    • Hill Billy 55MEMBER

      My MIL said that the Bargain City shop at Aspley is closed with all the insides removed. If the bargains are gone what hope have the punters.

    • Our local did the same until the parent company Metcash took it over and reopened it. Still going, some great products but hard to compete with all the big players around.

  2. It’s only fair…
    Unfortunately while some homeowners are suffering now after the discovery of defects in their buildings, Ms Weir said many people had made a lot of money thanks to the housing boom, and these people were not just developers.
    “Ultimately the whole community has benefited from this and it may be the whole community that will be paying for it, through government-assisted packages.”

      • “If a higher proportion of properties are reselling at a loss, it’s a sign of weaker housing market conditions,” report author and research analyst Cameron Kusher said.
        I guess that’s why they pay him the big bucks. Old mate should reconsider his beard.

    • Those who witnessed house price inflation erode their 20% deposit down to 10% would have no problem paying higher taxes to ensure house prices remain elevated.

      • The Traveling Wilbur

        20℅? Loosers. And unattractive Loosers at that.

        Everyone shoild know by now if it’s not zero it’s not a proper mortgage loan offer. Pffft. 20%. Amateurs.

      • proofreadersMEMBER

        And ScoMo is going to be riding to the bubble rescue soon, with that magnificent 15% deposit gap guarantee. All hands to the pump – ScoMo, Josh, RBA, APRA, banksters, mortgage brokers. How good is Straya.

      • @proofreaders. I am very surprised they have thrown absolutely everything at this so early and it’s hardly moving, things must be real bad. Plus we have reached the longest period without a global recession in history a week or two ago so the “good” times aint gonna last too much longer either

    • Mining BoganMEMBER

      The whole community?

      That’s a rather sweeping opening to the statement. If I find some people who haven’t benefited will Ms Weir retract her nonsense?

      • Yeah Renters love it, MOAR negative gearing = MOAR rental stock at lower prices apparently lol.. no such thing as rental stress or mortgage stress. It’s boom times forever everyone. Anyone who complains that flipping houses to your neighbour for more than last year is kidding themselves thinking they are living in a prosperous country is just jealous of those getting ahead. Gotta give it a go to have a go in this country according to ScoMo.

      • john6007MEMBER

        ” Ultimately the whole community has benefited ”
        I argue the reverse has happened, the community had paid for a few to get rich (from building units) ie, congestion, cars parked in streets v’s on the property, loss of gardens etc etc.

      • @John it’s a 0 sum game, I saw how it all played out in Ireland. Trust me, very few actually benefited and the whole country suffered in the fall out. A few developers got out and made a quick dollar, bankers, and the Government in terms of property taxes etc.. and then a few foreign loans meant the peasants were paying extra taxes after. All completely pointless, a waste of resources, time and money.

  3. CFMEU kills Aussie men while it complains about lethal coal mines.

    1 hour ago

    CFMEU calls for full inquiry into mine deaths after sixth fatality

    CFMEU itself is killing Aussies by refusing to have the same immigration rate at Japan – the unemployment rate in Japan is so low that even grandmas are hired to deliver for Uber Eats!

    5 Jul 2019

    Uber is recruiting grannies to deliver ramen in Japan

  4. California … the housing fiasco …

    Mass Exodus of Workers Due to Lousy Housing Market – The Santa Barbara Independent

    Why Stay in California When Good Jobs and Homes Are Elsewhere?

    California’s lousy housing market has gone from a trivial issue to a major crisis that may soon turn into a statewide economic downturn. From low-income laborers to high-income doctors, there are few industries that are safe from the state’s crumbling real estate market.

    The housing market itself is troubled by two factors: a lack of supply and rising costs. The Legislative Analyst’s Office (LAO), the state’s agency responsible for fiscal and policy advice, has estimated the shortage is between 3.5 million to 4 million units. The lack of housing has not only driven up prices by 24.9 percent (for two-bedroom homes) since 2010, but it has also had a noticeable effect on migration. In another report, the LAO found that between 2007 and 2016, net migration in California was negative one-million individuals.

    Interestingly, this mass exodus of people is siphoning off not just low-income earners but high-income earners as well. The tech firms and financial service giants of Silicon Valley and San Francisco will likely be the first to feel the effects of this squeeze on their workforce. … read more via hyperlink above …
    2019 15th Annual Demographia International Housing Affordability Survey

    • You have to wonder what the endgame is. We have let the finance industry run amok for so long and they can basically blow up the entire world. Why do we let these banking dweebs to do such damage?

      • Because they represent money and we worship money and as long as money is here all is good and I’d money goes away well we will just lower the rates and reduce services to those that never saw the money in the first place.

      • The Traveling Wilbur

        Endgame? Did someone say Endagaime?

        Maccas: Endagaime

        Adrift in space with no food or water or policy or votes, Tony Stabbot sends a message to Point Pipper as his oxygen supply starts to dwindle and his MSM media profile drops to dangerously low levels. Meanwhile, the remaining Maccas diners — Frydemburgers, Black Budget, Scomo and Barnaby Banned (again) — must figure out a way to bring back their vanquished allies for an epic showdown with the descendants of Keatos — the evil demigod who decimated the planet and the universe — and the remnants of the rebel resistance still fighting coal-i-lition within their own ranks.


      John Boutakis shared a link.
      3 hrs
      Deutsche Bank Collapse Has Begun!

      Make no mistake about it, if Deutsche Bank goes down, all the banks in the world will go down, it will be the beginning of the end for the global financial and monetary system.

      Banks worldwide will begin closing, hundreds of thousands of people, if not millions will lose there jobs and you will not be able to access any of your money, even ATM machines will run out of cash.

      There will be a run on the banks like you would not believe.

      Not only that, once they are declared bankrupt they will be going after your savings and retirement savings to bail themselves out.

      It’s called bank bail in, google it folks.

      This is not only a warning for everyone, it’s a fact.

      Please don’t make me out to be the bad person here, I am simply trying to tell you and warn you about what’s coming to not only help you but also so that it will give you time to prepare yourselves, with plenty of food, water, household and medical items in storage, Gold and Silver coins for barter ability and Cryptocurrencies.

      Very dark clouds have been looming over head as Deutsche Bank for a while now, staff are bracing themselves for one of the most severe job culls in banking since Lehman Brothers collapsed a decade ago with the German lender’s board set to approve plans to shed tens of thousands of people and more than €50bn of assets.

      This will ultimately lead to the biggest stock market crash and to the biggest real estate and bonds crash in human history as the global financial system is currently very very vulnerable.

      Global stock markets are at all time highs, they cannot and will not go much higher.

      We are in the biggest bubble in the history of mankind. The things that are currently happening with Deutsche Bank are a serious global economic collapse warning sign.

      Deutsche’s investment banking chief Garth Ritchie has gone from Deutsche Bank, and Christian Sewing’s plan to make 15,000 to 20,000 job cuts across the bank looks increasingly like a done deal.

      On Sunday, the board seems likely to rubber-stamp the proposed reorganisation, which would see up to 50% of jobs in the corporate and investment bank disappear.

      It will all begin today.

      Many experts are sounding the alarm about the economic collapse that Deutsche Bank will most likely cause within the very near future.

      “You could see Lehman-style scenes outside Deutsche Bank on Monday,” says one recently ex-managing director from the German bank, referring to the staff who streamed out of Lehman with their posessions in boxes in 2008.

      “It’s very sad what’s happening.”

      Renaissance Technologies, the hedge fund giant that Deutsche Bank AG has counted on as one of its largest client has been taking money out of its prime brokerage accounts with the German lender over the past few months according to people familiar with the move.

      Hedge funds have been migrating away from DB for years. Representatives for Renaissance and Deutsche Bank declined to comment.

      Many important chiefs, managers and traders are now leaving Deutsche Bank and this is also a HUGE warning sign that the Deutsche Bank Collapse Has Begun.

      If things keep getting worse which I believe they will, then this could lead to a major stock market crash, real estate crash, bonds crash and in the worst case scenario: A global economic collapse, where every person on the planet will be severely impacted.

      Nobody or no country will escape this one, Australia was lucky back in 2008 as they borrowed there way out of trouble leaving us today with a mountain of debt for our kids and grandkids to have to pay off.

      This time around Australia will not be so lucky, in fact I strongly believe that Australia will be one of the worst hit by this next collapse.

      • This guy is delusional it will never crash here. Apra, asic, scommo, kitchen sink, rba, immigration minister, newspaper are on the case already didn’t he read the news!

      • drsmithyMEMBER

        I love the way the bloke thinks the world will be so fvcked people are “bartering” with gold and silver coins to survive, but all the infrastructure necessary to run crypto networks and for end users to use them will continue to function.

        EDIT: Actually after perusing that Facebook page, I can see that as crazy ideas go, it’s not even trying.

      • proofreadersMEMBER

        Like every astute politician (aren’t all of them?), perhaps Angela Merkel has timed her exit late this year to perfection?

      • It will just follow a similar path to the GFC. IMF will just step in and buy up the toxic assets and keep them permanently on their balance sheet. Nobody will go to prison for the fraud that occurred. Carry on… nothing to see here.

      • If DB does blow up though, then wow. Most leveraged bank on the planet? Black swan anyone?

      • Exactly. If DB collapsing would really cause all that destruction, the answer is pretty simple – they won’t let it collapse.

      • The repeated use of “there” when “their” is appropriate is a dead giveaway this article can be scrolled past with impunity.

      • OK who put the Ketamine in the water cooler again ….. did everyone blink during the GFC or something …

      • As someone who still has a lot to learn about the world and economics, in my view would it not be possible for everyone to just agree to write all the debts off and pretend the collapse never happened if the whole globe was going to collapse? who would possibly benefit from agreeing to let it happen?

      • More importantly who is Trump going to bank with now and how will it effect his businesses – IQMWLTK …

      • robert2013MEMBER

        There has been conspiracy like chatter about DB for years. The piece as quoted asserts much but does not include enough recent evidence to support its claims.

      • It won’t need a snorkel. What’s the next-level accessory going to be its place?

      • Mining BoganMEMBER

        A miniature nuclear power station to recharge it as it runs. Amazon is amazing.

        Edit: Thorium of course.

    • The taxpayers of the Eurozone will backstop DB – ‘or else it’ll be a jackboot in the face, SCHWEINHUND!’

      • So that kinda means the tax payers in your view would then own the bank …. sounds kinda communistic … always knew some were closet commies ….

      • No I’m a crony capitalist. The taxpayers backstop the liabilities, the politicians make statements criticising the bankers, wait 2 years, then back to business as usual.

      • National socialism has a continuing mass appeal amongst bureaucrats in Brussels. And within Central Banks.