US Oct. existing home sales rose +1.9%m/m (vs est. 2.0%m/m) to 5.46mn (est. 5.49mn, prior revised to 5.36mn from 5.38mn), with an average price rise of 5.2%y/y. Although inventory/housing stock fell, the lift in sales reflects low mortgage rates and NAR commented positively on the recent rise in housing permits. Oct. Conference Board leading index fell -0.1%m/m (vs est. -0.2%m/m, prior revised to -0.2%m/m from -0.1%m/m). The Conference Board said that the (effectively as expected) report indicates a 4Q annualised growth rate of just below 2%. Nov. Philadelphia Fed survey rose to 10.4 from 5.6 (vs est. 6.0), but both employment and new order components fell.
Event Outlook
Europe: ECB President Lagarde gives the keynote speech at the Frankfurt European Banking Congress.
US: Nov University of Michigan consumer sentiment is expected to hold at 95.7.
Nov Markit Flash PMI’s are released for Japan, Europe and the US.
Existing-home sales rose in October, a slight recovery from the declines seen in September, according to the National Association of Realtors®. The four major U.S. regions were split last month, with the Midwest and the South seeing growth, and the Northeast and the West both reporting a drop in sales.
Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 1.9% from September to a seasonally-adjusted annual rate of 5.46 million in October. Despite lingering regional variances, overall sales are up 4.6% from a year ago (5.22 million in October 2018).
…Total housing inventory at the end of October sat at 1.77 million units, down approximately 2.7% from September and 4.3% from one year ago (1.85 million). Unsold inventory sits at a 3.9-month supply at the current sales pace, down from 4.1 months in September and from the 4.3-month figure recorded in October 2018.
There wasn’t much more data of interest.
It was, as usual, trade scuttlebutt with competing rumours pushing markets around. The key was the Congress; Hong Kong bill which is now inevitable, via WaPo:
The crisis over Hong Kong’s future took center stage in worsening U.S.-China relations Thursday, as protesters called on President Trump to sign into law a bill intended to protect human rights in the territory over Beijing’s increasingly strident objections.
The prospect of a diplomatic showdown between the United States and China over Hong Kong pushed Asian stock markets lower, after Congress passed a bill that paves the way for sanctions against officials involved in the crackdown on pro-democracy protests.
Chinese Foreign Minister Wang Yi said the U.S. actions severely damage bilateral relations and do not help world peace and stability, and state media urged the United States to “rein in the horse at the edge of the precipice” and stop interfering in China’s internal affairs.
“If the U.S. side obstinately clings to its course, the Chinese side will inevitably adopt forceful measures to take resolute revenge, and all consequences will be borne by the United States,” the People’s Daily, the Communist Party’s official newspaper, said in a front-page editorial.
…In Washington, the Hong Kong bill brought rare bipartisan cooperation even as the impeachment inquiry deeply divided lawmakers.
House Speaker Nancy Pelosi (D-Calif.) celebrated the bill’s passage as “a day of mutual respect for democratic freedoms, the courage of the young people there to speak out, and also [a] day of great bipartisanship in the House of Representative and the United States Senate.”
…The White House declined to comment on the bill, but it has near-unanimous backing as Congress appears determined to send a message to the Chinese government.
The bill has gone to the White House for signing and its unanimity makes it nearly impossible for Trump to veto. If he sits on it it becomes law in ten days anyway.
Who knows how China will react? It’s such a dummy-spitter most of the time that it is difficult to discern its true intentions. Taken at face value, the trade non-deal will collapse.
Right along with the Australian dollar. Though as I say, Beijing diplomacy is about as rational as a wailing babe so I wouldn’t bet on it.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
“… the Chinese side will inevitably adopt forceful measures to take resolute revenge, and all consequences will be borne by the United States.”
The way they phrase things sometimes is extraordinary. There’s obviously no word in Chinese for ‘diplomacy’.
8millMEMBER
China has that north Korean big brother feel to it
But the US not far behind it?
kodiak
As if, moron. False equivalencies from Aussies are so cute that I could just pinch their cheeks.
bolstroodMEMBER
Calling Reusa ! Calling Reusa !
kodiak
Why call him? He’s actually funny. The rest of you are true shills that are destroying this country. I’ll be watching with a bowl of popcorn from Honolulu.
bolstroodMEMBER
Drought ,fire are te fossil fuel industry destroying this country.
So pleased you are leaving, could you take switzer with you.
BubbleyMEMBER
Kodiak, are you drinking and posting? Because it sure seems like it.
kodiak
They are the guy in the bar with the glass jaw throwing their weight around. Have they no shame or intelligence at all? They have everything to lose from this. And now it’s getting ugly with Europe, too. Idiots.
I think the Madarin word for “diplomacy” is similar to the word or “butt hurt”…?
LBS
Yeah but then some miraculous news comes out and boom it goes back up. I need the damn thing to go back up on Mar April
DominicMEMBER
Leave it with me …
ArthurMEMBER
Take a look at the daily charts. We are at Point B in the corrective phase of a classic Elliott Wave cycle that started 10/10/2019. That means there is another substantial slide coming to complete the entire Elliott Wave cycle.
I must admit, I was very skeptical when I first studied Elliot Waves as part of technical analysis. My skepticism is getting less and less as time goes by and I see more instances. It’s quite rare to see a really pure Elliott Wave in FX trading as some kind of shock usually overpowers and busts it. But this one is pure and classic. So, expect another slide in the AUD next week. Then the wave will be complete and we have to wait to see what happens next. I regret to say I was too skeptical to put my money on this wave when I first noticed it, would have made tens of thousands by now.
LBS
Worse case scenario we leave our AUD here for a while till it gets back to what we want
bolstroodMEMBER
You honestly think it will recover ?
LBS
Maybe in 10 years lol
kodiak
I must say that I’ve never seen it in forex.
kodiak
Sweet as.
BrentonMEMBER
Corporate debt not liking what they’re seeing. CCCs blowing out again, even as many are trumpeting the reflation narrative. BBs not following as yet though.
BrentonMEMBER
If bonds have been sounding the alarm for some time, and then HY starts singing the sirens song, how long can equities pretend everything is kosher? History says not long.
DominicMEMBER
Yup, when this eventually blows, the debt space — BBBs, HY, and Leveraged Loans — are going to resemble Hiroshima. The Fed is going to need to hire a lot of people to hit the Buy buttons.
ContrarianMEMBER
I put on some trades on the LQD with this in mind could be quite a decent payoff or not.
Great. That’s a get-out-of-jail-free card for Scummo and Josh. Things were going so well under our stewardship, and then …. Kong Kong happened. “Circumstances beyond our control.”
Haha, yes, I’ve been pointing out the inevitable “external forces….not our fault” narrative that they’ve been building for a while, too…I think most will still swallow it, though…
proofreadersMEMBER
And don’t forget everything that is wrong/crook is also Labor’s fault even 6 years since they were last in government. The weight on the shoulders of the LNP of being the best economic managers (and indeed, managers of everything) is daunting.
GavinMEMBER
How good is blaming Labor for everything? To be honest they kind of deserve it too. A party of sycophants more interested in pleasing Jimmies and LBGTQI community than actually addressing the needs of the majority of working class folks.
flawse
FFS The source of malaise goes back 60 years. It didn’t just happen in the last couple of years or five years. Every damned political party of the last 60 years is up to their ears in it. It’s been treachery that deserves the usual fate of treacherous bastards – the whole lot of them.
ColinMEMBER
Maybe this time? Rudd & Swan had an excuse to nip it all in the bud & burn the undergrowth but they put their mates & ego’s first. Hard to see this crop do anything different if they have any way out.
flawse
There IS no way out! We’ve worked that out long ago eh?
Penguin4
Switzer is a K Hunt. The Aussie recession was made in Canberra and Martin Place.
ColinMEMBER
Yes. but you don’t control the Narrative……
ContrarianMEMBER
Mate Switzer is a degenerate I’m surprised you read his crap that bloke is a cheerleader to what’s wrong with Australia.
GavinMEMBER
If you want to understand the enemy you need to read what they say. :). Kind of like all the property spruikers.
Hill Billy 55MEMBER
I was at an investor briefing on Wednesday where Peter Switzer said he was having coffee with Friedegg on Thursday morning, so we can take this as being straight from the horses mouth. As a BB I was embarrassed at the crass behaviour of fellow BB’s at this meeting to people who wanted an actual debate about policy in our formerly great country.
jimbo
Heard him interviewed recently and by his previous standards he’s a bull turned bear. Not having seen or heard him for two years it was surprising.
…
“Here’s my opinion of the US game plan:
1) Twist Europe’s arm militarily and with trade to ultimately form a “western bloc” of 800m well armed people.
…
2) “Befriending” Russia drives a wedge between that potential scenario.
It’s not a requirement for “success”. Call it a “stretch goal”.
…
3) Choke China.
If and when the “western democratic bloc” crystalises properly, it will turn its trade attention to China. Flawed as are, when push comes to shove, the western democratic world, (shockingly) prefers western democracy over dictatorship. US-led, western hegemony, as terrible as it can be, is preferable than a super-power dictatorship.
…
4) Victory?
I think there are two possible “acceptable” outcomes to the “western bloc”: capitulation with huge reforms (probably including democracy), or revolution hopefully leading to democracy (and possibly breaking China into several countries based roughly on existing provinces). What cannot happen is for all-powerful Xi and the CCP to become a military and technological rival. Hegemony must prevail.
…
Penguin4
No the most desirable outcome is a fragmentation of china so that it cannot form a credible threat again.
Djenka
If a mass needs “twisting its arm” into compliance can it crystallize?
It is a false dichotomy peddled heavily here that China’s claim for slice of world business cake is an attack on democracy and that one must be only either a friend (twisting China’s hand) or a foe (working with China)
Another often forgotten factor is that hurting China financially hurts back the hurter too. Probably hurts hurter more than the victim itself.
Add to that the factor that China can go several times deeper into recession than any long tome developed countries (people still know how to make a living on a 2 bucks a day income), the outlook for one sided victory is probably nill. At best, confrontation with China because China has beaten US in it’s own game and on US own tilted-to-us-favor field can bring economy’s scorched earth. At worse it will be literally scorched earth.
sglenMEMBER
Nucleation, that’s how you crystallise. A little bit of energy, a little bit of agitation, a mote to focus on…et voila. Hmmm, Hong Kong is a mote…
I’m still amused by the ‘China-strong’ posturing. You know who doesn’t posture and threaten? Someone who is strong.
Remember the hyperarousal response isn’t just fight or flight. It’s fight, flight, posture, or submit. And the CCB isn’t dumb enough to fight, are too face-conscious to flee or submit, so posture is all they got.
The CCB knows they peeked over the parapet 20 years too early and are sh!tting bricks. Or quantum ballistic carrier death stars, whichever is easier to pass.
Djenka
wut?
sglenMEMBER
Oh man, I knew I shouldn’t have mixed chemistry and geopolitics and pop culture, it confuses the NESB’s.
The Reader’s Digest version:
The CCP (not CCB, stupid auto complete) believed their own propaganda, got too aggressive too early and now is a Jack Russell in a wolf pack – All bluff, bark, and bluster.
matthewMEMBER
Should have read Australia on the verge of collapse
DingwallMEMBER
A floating poo is always on the verge of collapse …………
SnappedUpSavvyMEMBER
Congress passed a bill that paves the way for sanctions against officials involved in the crackdown on pro-democracy protests.
what could these sanctions be? is this really a nothing burger
“… the Chinese side will inevitably adopt forceful measures to take resolute revenge, and all consequences will be borne by the United States.”
The way they phrase things sometimes is extraordinary. There’s obviously no word in Chinese for ‘diplomacy’.
China has that north Korean big brother feel to it
But the US not far behind it?
As if, moron. False equivalencies from Aussies are so cute that I could just pinch their cheeks.
Calling Reusa ! Calling Reusa !
Why call him? He’s actually funny. The rest of you are true shills that are destroying this country. I’ll be watching with a bowl of popcorn from Honolulu.
Drought ,fire are te fossil fuel industry destroying this country.
So pleased you are leaving, could you take switzer with you.
Kodiak, are you drinking and posting? Because it sure seems like it.
They are the guy in the bar with the glass jaw throwing their weight around. Have they no shame or intelligence at all? They have everything to lose from this. And now it’s getting ugly with Europe, too. Idiots.
I think the Madarin word for “diplomacy” is similar to the word or “butt hurt”…?
Yeah but then some miraculous news comes out and boom it goes back up. I need the damn thing to go back up on Mar April
Leave it with me …
Take a look at the daily charts. We are at Point B in the corrective phase of a classic Elliott Wave cycle that started 10/10/2019. That means there is another substantial slide coming to complete the entire Elliott Wave cycle.
I must admit, I was very skeptical when I first studied Elliot Waves as part of technical analysis. My skepticism is getting less and less as time goes by and I see more instances. It’s quite rare to see a really pure Elliott Wave in FX trading as some kind of shock usually overpowers and busts it. But this one is pure and classic. So, expect another slide in the AUD next week. Then the wave will be complete and we have to wait to see what happens next. I regret to say I was too skeptical to put my money on this wave when I first noticed it, would have made tens of thousands by now.
Worse case scenario we leave our AUD here for a while till it gets back to what we want
You honestly think it will recover ?
Maybe in 10 years lol
I must say that I’ve never seen it in forex.
Sweet as.
Corporate debt not liking what they’re seeing. CCCs blowing out again, even as many are trumpeting the reflation narrative. BBs not following as yet though.
If bonds have been sounding the alarm for some time, and then HY starts singing the sirens song, how long can equities pretend everything is kosher? History says not long.
Yup, when this eventually blows, the debt space — BBBs, HY, and Leveraged Loans — are going to resemble Hiroshima. The Fed is going to need to hire a lot of people to hit the Buy buttons.
I put on some trades on the LQD with this in mind could be quite a decent payoff or not.
https://switzer.com.au/the-experts/peter-switzer/aussie-recession-made-in-hong-kong/
Great. That’s a get-out-of-jail-free card for Scummo and Josh. Things were going so well under our stewardship, and then …. Kong Kong happened. “Circumstances beyond our control.”
Haha, yes, I’ve been pointing out the inevitable “external forces….not our fault” narrative that they’ve been building for a while, too…I think most will still swallow it, though…
And don’t forget everything that is wrong/crook is also Labor’s fault even 6 years since they were last in government. The weight on the shoulders of the LNP of being the best economic managers (and indeed, managers of everything) is daunting.
How good is blaming Labor for everything? To be honest they kind of deserve it too. A party of sycophants more interested in pleasing Jimmies and LBGTQI community than actually addressing the needs of the majority of working class folks.
FFS The source of malaise goes back 60 years. It didn’t just happen in the last couple of years or five years. Every damned political party of the last 60 years is up to their ears in it. It’s been treachery that deserves the usual fate of treacherous bastards – the whole lot of them.
Maybe this time? Rudd & Swan had an excuse to nip it all in the bud & burn the undergrowth but they put their mates & ego’s first. Hard to see this crop do anything different if they have any way out.
There IS no way out! We’ve worked that out long ago eh?
Switzer is a K Hunt. The Aussie recession was made in Canberra and Martin Place.
Yes. but you don’t control the Narrative……
Mate Switzer is a degenerate I’m surprised you read his crap that bloke is a cheerleader to what’s wrong with Australia.
If you want to understand the enemy you need to read what they say. :). Kind of like all the property spruikers.
I was at an investor briefing on Wednesday where Peter Switzer said he was having coffee with Friedegg on Thursday morning, so we can take this as being straight from the horses mouth. As a BB I was embarrassed at the crass behaviour of fellow BB’s at this meeting to people who wanted an actual debate about policy in our formerly great country.
Heard him interviewed recently and by his previous standards he’s a bull turned bear. Not having seen or heard him for two years it was surprising.
The trade deal is dead. However, the ‘west’ has almost united into a defacto bloc around the current hegemon.
Which I argued ~18m ago was the game. Trade was just the proxy.
https://www.macrobusiness.com.au/2018/07/australian-dollar-smashed-world-gathers-trump-vs-china/
Excerpts:
…
“Here’s my opinion of the US game plan:
1) Twist Europe’s arm militarily and with trade to ultimately form a “western bloc” of 800m well armed people.
…
2) “Befriending” Russia drives a wedge between that potential scenario.
It’s not a requirement for “success”. Call it a “stretch goal”.
…
3) Choke China.
If and when the “western democratic bloc” crystalises properly, it will turn its trade attention to China. Flawed as are, when push comes to shove, the western democratic world, (shockingly) prefers western democracy over dictatorship. US-led, western hegemony, as terrible as it can be, is preferable than a super-power dictatorship.
…
4) Victory?
I think there are two possible “acceptable” outcomes to the “western bloc”: capitulation with huge reforms (probably including democracy), or revolution hopefully leading to democracy (and possibly breaking China into several countries based roughly on existing provinces). What cannot happen is for all-powerful Xi and the CCP to become a military and technological rival. Hegemony must prevail.
…
No the most desirable outcome is a fragmentation of china so that it cannot form a credible threat again.
If a mass needs “twisting its arm” into compliance can it crystallize?
It is a false dichotomy peddled heavily here that China’s claim for slice of world business cake is an attack on democracy and that one must be only either a friend (twisting China’s hand) or a foe (working with China)
Another often forgotten factor is that hurting China financially hurts back the hurter too. Probably hurts hurter more than the victim itself.
Add to that the factor that China can go several times deeper into recession than any long tome developed countries (people still know how to make a living on a 2 bucks a day income), the outlook for one sided victory is probably nill. At best, confrontation with China because China has beaten US in it’s own game and on US own tilted-to-us-favor field can bring economy’s scorched earth. At worse it will be literally scorched earth.
Nucleation, that’s how you crystallise. A little bit of energy, a little bit of agitation, a mote to focus on…et voila. Hmmm, Hong Kong is a mote…
I’m still amused by the ‘China-strong’ posturing. You know who doesn’t posture and threaten? Someone who is strong.
Remember the hyperarousal response isn’t just fight or flight. It’s fight, flight, posture, or submit. And the CCB isn’t dumb enough to fight, are too face-conscious to flee or submit, so posture is all they got.
The CCB knows they peeked over the parapet 20 years too early and are sh!tting bricks. Or quantum ballistic carrier death stars, whichever is easier to pass.
wut?
Oh man, I knew I shouldn’t have mixed chemistry and geopolitics and pop culture, it confuses the NESB’s.
The Reader’s Digest version:
The CCP (not CCB, stupid auto complete) believed their own propaganda, got too aggressive too early and now is a Jack Russell in a wolf pack – All bluff, bark, and bluster.
Should have read Australia on the verge of collapse
A floating poo is always on the verge of collapse …………
Congress passed a bill that paves the way for sanctions against officials involved in the crackdown on pro-democracy protests.
what could these sanctions be? is this really a nothing burger