Macro Afternoon

Stocks are falling across the region as tariff concerns over the Chinese trade deal mount alongside increased tensions in Hong Kong. The RBNZ lift its interest rate unchanged which saw the Kiwi leap higher while the Aussie dollar continues its slow deflation as the USD firms against the majors.

Chinese stocks are really on the back foot now, with the Shanghai Composite just holding on above 2900 points by being down 0.5% going into the close. The chaos in Hong Kong is not helping traders there with the Hang Seng Index gapping down and then some, selling off most of the day to be down over 2% to 26511 points. Price has completely cast aside trailing ATR support and the e previous support/resistance zone that was cleared before this blowoff rally started:

Japanese share markets are also in selloff mode as the prospect of a China/US trade deal stumbles with the Nikkei 225 taking back all of its previous gains to be down 0.7% to 23340 points. Yen buying on the risk off trade is not helping with the USDJPY pair hovering just above the 109 handle as momentum wanes, with the trendline from the late October low broken:

The ASX200 is also falling quickly, down 0.8% to close at just a smidgen under 6700 points and unable to clear that very important resistance level.  The lower Aussie dollar hasn’t helped agaian as the Pacific Peso continues to struggle to get any traction although the pace of decline is falling with a point of control forming just under the mid 68 cent level:

Both S&P and Eurostoxx futures are falling slightly with the S&P500 four hourly chart showing price still holding on above trailing ATR support, but tracking sideways at the end of last week’s highs as momentum remains poised:

The economic calendar is packed tonight with German, UK and US CPI prints for October.

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Comments

    • The world needs to put a tax on single-use plastic. We already knew that.

      About a decade ago, Twiggy said he wants to put aborigines into jobs. But then decided that he loves 457 visas more – causing aborigines to remain in poverty.

      Now he is pretending to be an environmental hero – just like another billionaire who imports 457 visa staff en masse (Mike Cannon-Brookes).

  1. The Traveling Wilbur

    The RBNZ lift its interest rate unchanged

    Very droll CB. Very droll.

    How do you tell who the Kiwi is when you’re playing Scrabble?
    Pick up all the tiles you’ve got that are an A, E, I, O or U and throw them on the floor in front of the other players.

    Anyone who bends down to pick one of them up is definitely not a Kiwi.

  2. HONG KONG ….

    Hong Kong in chaos as protesters gather at universities with bows and arrows … The Guardian

    https://www.theguardian.com/world/2019/nov/13/hong-kong-student-protesters-bows-arrows-petrol-bombs-universities

    Hong Kong on edge after police warn city on ‘brink of breakdown’ … Aljazeera

    https://www.aljazeera.com/news/2019/11/hong-kong-edge-police-warn-city-brink-breakdown-191113041341428.html

    Hong Kong protests: Rule of law on ‘brink of collapse’, police say … BBC

    https://www.bbc.com/news/world-asia-china-50384360

    • When they crack down there has to be a fair chance of a decent disruption to world trade, once the sanctions and boycotts start…..wonder whether a punt on a 1987 style event might be worthwhile…….don’t think many limit down days would be needed.

      • Everyone assumes that China will be punished. Maybe that won’t happen though, nobody wants to lose money. Just take a look at our government, universities, politicians, and all the regulators. They love Chinese money and can’t seem to stop taking it.

    • What we need is a Debt Jubilee where the RBA pays to wipe out all consumer and residential mortgage debt. Economic growth will go through the roof with everyone trying to become as indebted as possible for the next Jubilee.

    • I read a few places that QE here will crash the aud. Seems impossible at this point as I thought 0.75 interest rates would do it but who knows…

      • well, we’ll find out soon enough as it seems RBA is no willing to cut below 0.5%. So QE is coming early next year. I really want to know how they plan to implement it.
        What would be the impact on savers?

  3. ‘Greens ‘exploiting tragedy to pump up their cult’, Craig Kelly says.

    Well, I suppose if you are fully invested in denial cults, you think you know what you are talking about – well at least a normal person would, but Craig K???

    How many years have the Greens been in power? 🙂

    • That’s a bl..dy good read. Was there a time long ago when trusted experts with actual experience were allowed to contribute to policy for the betterment of citizens, I’ve heard it spoken of.

      • Everyone knows “experts” are biased towards their “expertise”.

        That’s why they can’t be trusted to make balanced decisions.

        • Chomsky gets it right and critical theorists and the loopy left can once again raise their glass in a toast to a job well done as wingmen to the greedy.

    • Interested PartyMEMBER

      Not much to say about that read, except every arsole on this site should read it and think about stuff before spraying crap opinions over everyones screens. It’s been sickening to read some of it.

      What he say’s is true, by my studies on water cycles and trees creating rain. Any doubts on that….research oxygen isotope studies in rainfall. Cut the trees…lose the rain.

      • But the reef is 100% okay?!

        You seem to struggle when it comes to connecting the dots with the reef but no trouble with this? Colour me confused….

        or do you just not like Taswegians having a go at qld?

        • Interested PartyMEMBER

          lol……Tom from tassie is most welcome to voice his thoughts and opinions….as is your good self. Having a go at Qld’ers is a national sport…why would that worry me. Being called scum is a bit rich though. I don’t think he represents tas folk well, the ones I have chatted with over the years have been pretty decent people…not sure what’s up with Tom. I wish him well, and hope he recovers soon.
          I don’t require an article from the guardian to tell me what to think about the reef, or to join any dots. You see, I live up here, visit the reef on the odd occasion, have fished, speared, snorkelled, and camped overnight on the reef many many times over the years. The stories are the typical over-hyped media beat up. It is true that the close coastal reefs are severely silted, and just about dead. This is primarily caused by the sugar industry and land clearing. Coal cannot be blamed for that. Tom apparently does think that.

          In fact, a recent public works job repairing/rebuilding a boat ramp up here had to temporarily stop work due to the toxic muds that they had disturbed in the construction/dredging works associated with that. The toxins were ag based runoff that had concentrated in the silts there. The close in reefs don’t stand a chance and are a mess.

          It’s also true there are areas of the reef proper ( outside the shipping channel ) that have been bleached…but….. the damage is not permanent….the reef is not “stuffed” as Tom put’s it. Please read this…..https://www.rrrc.org.au/good-news-for-coral-bleaching-on-the-gbr/

          Don’t get caught in the emotional whirlwind of the MSM.

          edit to add……..feral pigs have caused a lot of silt runoff as well, they churn the soil banks of the creeks up here and wet season erodes the loose soil away and out to sea. It settles on the close reefs mostly.

          • As have I, and Lizard etc are easily 20 years from recovery and that’s without another back to back bleaching. Something that basically rarely ever happened in the past and hasn’t happed on a scale of the last bleaching. Also since i was young bloke, the plastic pollution and the decline in fish stocks, and macro-aquatic sea-life is very evident. There is a tonne of spin from the local fishing/mining lobby.

          • Interested PartyMEMBER

            Agree with both of you.
            On the ASS….Reef park is a small housing estate in Port Douglas that suffers extensively from the effects of it. Hot dip gal posts dissolve in 5-10 years. The estate should never have been developed….but Skase was running rampant. He is not responsible, but caused the gold rush in the beginning.

  4. So earlier today I talked about purchasing power being destroyed by CBs.
    https://www.macrobusiness.com.au/2019/11/adios-housing-affordability/#comment-3555027

    Example:
    https://www.youtube.com/watch?v=1k3c6W7rXmA
    It wasn’t long ago that Lamborghini Miura’s were selling for $200k odd.. now in the $3m+ range.
    and..
    https://jalopnik.com/japan-wants-you-to-stop-buying-all-its-skyline-gt-rs-1831320174

    As an example of how ridiculous prices have become, he told us that just last week they sold an ultra-rare 400R for “three times what it cost new.” Bear in mind when the 400R was new in 1996 it had a ¥12,000,000 ($110,000) starting price.

    This is the collector car world of course, but like Gold it’s a good hedge against central banks and fiat being devalued.. Yet CBs think inflation is low.. LOL. It is if you ignore all the good stuff I suppose.