Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

A slowdown but not a cessation of selling activity in stocks across the region today, with currency and bond markets closely watching the Yuan fix for stability. The RBA meeting was a fizz but the Australian dollar leapt higher, while gold took a very small breather after its big surge overnight.

Meanwhile, the Shanghai Composite continues in free fall, now down 1.5% going into the close at 2777 points while the Hang Seng Index is only off by 1%, recovering somewhat later in the session to be at 25885points. This keeps it just above the January lows at 25000 points:

Japanese share markets have only fallen about half as much, helped by a weaker Yen finally, with the Nikkei 225 off by 0.6% to 20585 points. The USDJPY pair has bounced back above the 106 handle after some stability in the Yuan fix, but there’s a lot of resistance overhead:

The ASX200 was the big casualty today however, walloped by a 2.5% loss down to 6478 points as everything sold off although strangely Fortescue rallied even as the iron ore price continued to fall. With no help from the RBA or the trade surplus figures, the Australian dollar remains depressed below the 68 handle and on a nice downward trajectory:

S&P and Eurostoxx futures are relatively flat, down only 0.1% on the continent with the potential to cease the dumping of stocks lifting. The S&P500 four hourly chart is showing a tentative bottom, bouncing off of 2800  points, but this is early days yet:

The economic calendar is relatively quiet tonight with German factory orders the only one on the radar.

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  1. Several things (AUD, Aus bonds, Euro shares) havknga little bounce late today … bottom… or dead cat!?

  2. “although strangely Fortescue rallied even as the iron ore price continued to fall.”

    Was very strange. Massive intraday swings. -6.5% at open, only to reverse back up to +5%, before dropping back down to +2.8% right at the close.

    Not sure why, when IO has been getting reamed and the ASX was in a major sell-off.

    Ah well, see what happens tomorrow.

    • The Traveling Wilbur

      Ah… re the article content (not your commentary) I don’t see the problem. I believe the end process for the bacon self delivery system going on here can cost as little as 8c.

      What’s next? Americans complaining about it raining doughnuts?

      • C.M.BurnsMEMBER

        that punter with the feral pig problem should get all Lean Six Sigma on them, buy one of those flame throwers from Elon Musk and go into the smoked bacon business.

    • I sympathise with the man, but has he considered, just maybe, that the government could kill those hogs for him? You see so many of these “I needs muh guns” stories, but the human cost of personal access to high capacity semi auto rifles far outweighs most of the scenarios. We have feral pigs here, the govt has many plans in place to manage them (not all successful), and even with our gun restrictions professional pest control shooters can get semi autos for this very purpose. There’s always more than one way to skin a cat and mister murican small govt won’t see that becuase he won’t wanna pay more taxes so the govt can shoot the hogs while restricting personal high capacity semi autos and thus saving dumb muricans from themselves.

      I’m a mad gun nut but I like our laws because they keep us safer and if it means I miss out on some fun times, too bad (this opinion is not popular with my fellow shooters). On a related note, if Scummo wants me to go where the jobs are in the rural areas he should give me a horse, a gun and loads of boolits and I’ll work for a pittance shooting feral animals.

      • The Traveling Wilbur

        Yes. Fine. But enough about the Oneee Naaation and Nationals voters, what are your plans for the local wildlife?

      • C.M.BurnsMEMBER

        i would suspect that you also don’t need to kill all 50 feral pigs before they decided that they didn’t want to hang around your back-yard and ran back into the forest. In fact, I’d speculate (happy to be corrected) that after the first few died to loud gun fire, they’d all disappear back to where they came pretty damn fast

  3. I just heard the Honorable Matt Canavan on the radio. Gas reservation is coming. Sometime in the future. And it won’t be retrospective.

    And while we are on things power related, here’s Betoota’s take on Nuclear.
    (they used a naughty word so I had to tinyurl it)

  4. Anyone see the short seller that tagged Blue Sky back in action on RFF??

    I just went to read the hot copper boards for a good dose of schadenfreude. Man some of those sheep deserve to be shorn.

    • Every Dominic in the world is offering an answer in the thread underneath. Hopefully Bloomberg blows their mind with a Scandinavian version of the chart for comparison.

      • They all miss the obvious. The first list can be produced in other countries using ultra cheap labour. The second list has to be delivered at home with home country costs.

      • And a lot of what has gone up are what can be more efficiently provided by the government. They are the things that support the human infrastructure in the country.

      • drsmithyMEMBER

        Hopefully Bloomberg blows their mind with a Scandinavian version of the chart for comparison.

        Won’t matter. It is an article of faith – even an outcome that is good with Government involved would have been better without it (and the definition of “good” can be adjusted as required to “prove” it).

      • I’m surprised they’re not quoting “Einstein” “the definition of insanity…”
        or what some libertarian on the internet said Einstein said.

    • john6007MEMBER

      The CO2 one does not really account that China smelts lots of steel & manufactures lots of products etc. which are then exported to other countries. For example, I’m sure there is a lot of C02 produced in the manufacture of all the cars Australia imports.

  5. someone please help me understand this..

    From reading various news articles all over.. every time the yuan was falling PBOC had to intervene in order to defend it. Now PBOC decided to let is sink so market can decide its value and US accuses China of being currency manipulator. Am I reading reading the situation right?

    Also, since US is paying for Chinese imports with money created out of thin air (US treasuries) isn’t it better for the US dollar to be stronger as it will cost less zeros to type on the keyboard plus China will have to send more of their manufactured sh1te for less worthless paper or excel file. Ignore this one.. it’s just the wine talking but really want to understand the first question.

  6. The Traveling Wilbur

    Statistics New Zealand has released its labour force data for the June quarter, with the unemployment rate falling 0.3% to an 11-year low of 3.9%.

    Below are the key points from the release:

    Unemployment rate fell to 3.9% – lowest since June 2008.
    Underutilisation rate fell to 11.0% – lowest since September 2008.
    Employment rate rose to 67.7% from 67.5% in the March quarter.

    This is what happens when workers get choice bro.

    • Desperate times call for desperate measures..if that’s a twin turbo 300zx it’s a bargain with or without the sexy man.

    • Car is here.

      Interested in swapping for another manual turbo car. After something with 4 seats

      – Twin turbo
      -Low km car for its age
      – Viper alarm system
      – Aftermarket exhaust
      – Nardi steering wheel
      – Red interior dash lights
      – HID headlights
      – Full aftermarket sound system with pioneer double din headunit

      Always a well looked after car, has a few spots that need attention on the car boot, also the seats have some rips. Other than that it is mechanically A1. Message me for any more info or questions.

      EDIT: The beautiful man does not come with the car.

  7. Incoming alert to France, aussie rower para wife inbound for le rallye du canal du Midi …..

  8. I’m watching “Waltzing the dragon with Benjamin Law” on ABC very wide ranging (and very shallow) look at Chinese/Australian relations through history and general Australian history loosely through the lense of a first generation Australian and his family. Not sure I like the message so far but started watching because I was channel surfing and recognised the family’s Chinese restaurant, it’s in my hometown (Caloundra, Sunshine Coast), it always makes me laugh because of the name “Sunny Villege”, it used to be called “Sunny Village” but they moved premises about 10 yrs ago and somehow stuffed up the spelling lol

    • TailorTrashMEMBER

      Watched that …good luck to a first generation Australian telling his story …but strongly pushing the line that the Chinese were here in parallel to the Europeans ..and concluded with the message that the Chinese were on the north coast trading before white settelment came over as a tad pushy ……expect this message to be ramped up in coming years …..the 9 dash line is secure ……the 27 dash line
      needs to be built …..the diverse ABC will be useful no doubt