Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

The bounce is on as equity markets in Asia catch up to the relief rally from Wall Street on Friday night, with the bond market selling off slightly, temporarily staving off concerns over yield curve inversions. This all seems to be on a flimsy promise of more talks between China and the US on trade, and not much else, so don’t get too excited!

Chinese stocks are doing the best, with the Shanghai Composite rebounding to be up nearly 2% at 2873 points while the Hang Seng Index is doing even better, up 2.2% to finish at 26297 points. This is a great result, sending the bourse up to a new high and above the high moving average but not quite above the previous bounce point:

Japanese share markets are doing well as Yen stays steady with the Nikkei 225 advancing nearly 0.8% to finish at 20536 points. The USDJPY pair is firming once more here after remaining in a tight band on Friday night, with the potential to breakout above the 106.40 level as volatility reduces to pre-breakout levels:

The ASX200 is starting the week with a bang, up 1% even to close at 6467 points, with bank and oil stocks leading the way. The Australian dollar is flat however with no catalysts to get it moving, still stuck in a tight band just below the 68 handle as it still signals weakness ahead:

S&P and Eurostoxx futures are firming nicely, up 0.5% or so indicating more upside ahead tonight as everyone hopes this dead cat comes back alive. The S&P500 four hourly chart shows price heading back up to significant resistance at the 2930 point level but can this be sustained:

The economic calendar starts the week slowly with some Treasury auctions and final CPI figures in Europe.

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    • It’s behind a paywall. I avoid it now as much as possible, got c. Diff from a cocktail of antibiotics years ago and had to drastically change my diet for years to eventually get over it. Scared as hell to take penicillin ever again

    • ErmingtonPlumbingMEMBER

      I christened a brand new, Shiny, $1200 mini reel today through an Earthenware inspection opening that when chiseled open revealed weeks of mashed up, composting grogans and toilet paper.
      This choke had turned into a bit of a “Dry Choke” and didn’t want flow down the pipe after I had jetted out the Roots farther down stream.
      So I had to carve it up with the jetter, right back to the IO, atomising a small portion of these Bondi cigars into a fine and smelly mist underneath the old house in Dundas I was working on.
      It was also spitting bits of poo all over my proud new purchase!

      I gave it a good hose down afterwards before my next sewer choke at a servo in Sutherland.
      That one wasn’t much more pleasant.

      I did have a lovely kerbab across the road afterwards.
      Probably should have washed my hands first though.

      At least I can rest assured that my Gut Bacteria is always being replenished after any antibiotics courses.

      Maybe I can charge people to come and attend these kinds of jobs,….as a kind of healthy gut therapy.

      Just stand a little closer mate.

      Ca$hink, Ca$hink

  1. I don’t thinnk this is over yet.

    Any views as to whether a no-deal Brexit is priced in, or whether it will cause market ructions?

    • I tend to think its impossible to quantify what no-deal would actually MEAN in terms of economic impact. No one really understands the full impact. For example, the UK (as an EU member) doesn’t actually have to count cross border trade to the rest of the EU. It’s an open question as to whether they really know exactly how much trade there is right now. So if there is a split, it’s kind of hard to know what the baseline is, let alone how it might shift.

      So while some uncertainty is priced in, and there might be a trading spike in some direction the moment the split happens (if it happens), it won’t actually be until months later as GDP, balance of payment, retail etc figures post-split come in that we can gauge the impact. Then markets could respond once again (positive or negative, I dunno) – but hard.

      • TLDR version: some ructions but then a more important long grind in some direction or another. (My guess – GBP massive drop, leading to Europe recession, UK recovery).

    • TailorTrashMEMBER

      If old blighty has not by now been totally diluted by multicultural coffee culture wankerism then they will be fine . Sticking it to the French and Germans is in their blood ….and for all their faults they have many friends around the world …..and why is half the world wanting to flock to their “green and pleasant land “ ?…..
      .. they will be fine …..Go Bojo !!……

      • The Pirate nation that grew to an empire and then signed the Atlantic Treaty, when it’s back was to the wall, poodleized … then with the advent of neoliberalism went lock step with its betters through TINA via Thatcher and put labour in the pit … offset by the City of London. Then again Brexit was always about keeping Corbyn or non Thirdway Labour out of government, but then you probably didn’t read the link I posted below and unaware [????] of the agency pushing this stuff – for decades – and only respond to ideological purity …. so much for those grousing on about financial elites thingy ….

        It is said that ignorance is bliss ~~~~~

  2. The Horrible Scott Morrison MP

    Once I was invited to a private property investor relations party with Katy Perry, where she, being pretty tipsy, chose me as an object for the manifestation of her passion.

      • The Horrible Scott Morrison MP

        She was a wonderful church member. Regular attendee, voice like an angel, and a pathological disgust for leaners.

    • Oh geez these articles again.

      Thank f#ck!

      It’s 2017 again, even sooner than we thought, which means the bull trap is closer than ever to snapping shut.

      Bring that sh!t on.

    • The Horrible Scott Morrison MP

      This savy investor knows how to make a profit. Use max leverage to buy loss making properties 100km away from the CBD. He’s making a killing on tax deductions because he’s getting a go for having a go.

    • Its always the same playbook though. They supposedly are making 100’s of K’s per year sitting on their “portfolio” but the articles are always thinly veiled advertorials for their property spruiking business.

      • They even included “doubles every seven years”.

        The only bit they forgot was to reveal that his mum and dad gave him the $35K for his first deposit.

      • If everyone is a winner with property why is there so much gnashing of teeth when values fall even a tiny bit? Seems odd to me..


    Hong Kong billionaire tycoons call for end to protests as unrest affects their profits – ABC News (Australian Broadcasting Corporation)

    Hong Kong’s property tycoons are hurting, the share market is tanking and the tourism sector has taken a beating as the pro-democracy movement continues to strangle the city. … read more via hyperlink above …
    Hong Kong protests: Huge crowds rally peacefully – BBC News

    Some 1.7 million take part in 11th week of Hong Kong protests … CNN News

  4. 4 Corners doing crapily built apartments tonight. They missed a marketing opportunity by not renaming the show 3 Corners. Should be good though.

  5. For the stunned mullet camp ….

    1974 Charles Koch Speech: “Anti-Capitalism and Big Business” and How the Powell Memo Did Not Go Far Enough

    In this 1974 speech, Charles Koch claimed that “business has consciously assisted the government in destroying the free market.” This speech was given during the second term of Republican President Richard M. Nixon, a few months before he resigned in disgrace.

    This address was part of a meeting on “The Anti-Capitalist Mentality,” which was organized by the Institute for Humane Studies. IHS was founded in 1961 by F.A. “Baldy” Harper to advance Libertarian ideas more radically than the Foundation for Economic Education by, for example, calling all taxes “theft,” despite the Constitutional provision authorizing taxes. Charles began supporting IHS in 1964, and took over IHS in 1973 after Harper died. So, this speech was an address to followers of a group he controlled; IHS continues to play a substantial role in the Koch empire and his efforts to change the law and legal policy to suit his agenda.

    At that meeting, Koch claimed, among other things, that “[a]nti-capitalist feelings in the United States are probably more virulent today than ever before. Yet the effort to stem this challenge to our traditional economic values have been ineffective. It is crucial that we understand what is happening, why the defensive efforts have floundered, and what approach, if any, would succeed.”

    In this speech, Koch criticizes the Powell Memo for not going far enough, in his view. He also praises his fellow members of the Mt. Pelerin Society–Milton Friedman and F.A. Hayek–along with IHS for providing better solutions to what he calls decades of anti-capitalism in the United States. – Snip

    7 point highlights of ergot level musings is a treat ….. follow me …. chortle …

      • Yet some are befuddled to be informed that such individuals and think tanks funded Third Way and what that portends ….

        Anywho … “As I perceive the situation in which the pro-capitalist businessman finds himself today, there are basically four ways in which he can fight for free enterprise- through education, through the media, by legal challenges, and by political action… I do maintain, however, that the educational route is both the most vital and the most neglected.”

        “The important strategic consideration to keep in mind is that any program adopted should be highly leveraged so that we reach those whose influence on others produces a multiplier effect. That is why educational program are superior to political action, and support of talented free-market scholars is preferable to mass advertising.”

      • Should add if some don’t remember mig saying [tm] – having to wait for the next generation [batch of malleable minds – previous batch had high reject rate] before the “code” would be dominate and thus ring in utopia ….

    • Yet some are befuddled to be informed that such individuals and think tanks funded Third Way and what that portends ….