Macro Afternoon

Weekend news of a possible resolution or movement of some kind in the US/China trade talks although the IMF is right to say this might be just domestic politics posturing as one country tries to stabilise internal struggle while the other tries to kick out a corrupt autocrat. Does it matter which? Gold fell again today as the USD continues to grow stronger, while Bitcoin revisited a monthly low, falling well below $7000.

Chinese stocks are having a much better start to the week than anticipated, with the Shanghai Composite taking back its Friday losses to be up nearly 0.7% and back above the 2900 points resistance level. The Hang Seng Index is doing twice better due to the pro-democracy voting result from the weekend, launching 1.5% higher at 27028 points. This puts price but above previous trailing ATR support and test the resistance zone at 27000 proper, setting up for a potential breakout from here:

Japanese share markets also had a strong push, helped by a much weaker Yen with Nikkei 225 closing 0.7% higher to 23292 points, as it builds above daily support levels at 23000 points. The USDJPY pair gapped higher on the Monday morning open and then advanced further, making a significant breakout on the four hourly chart above the high moving average, now ready to tackle the 69 handle:

The ASX200 is the relative laggard, up only 0.3% to advance further past the 6700 points barrier, despite the banking sector concerns as Westpac lost ground again. The Aussie dollar gapped a little higher on the open but was unable to crack the 68 handle and is slowly melting from there as the City opens, where I still expect a test of last week’s extreme low at the 67.70 level:

Both S&P and Eurostoxx futures have gapped higher, up at least 0.7% with the S&P500 four hourly chart showing price no longer anchored at the previous trailing ATR support level at 3100 points and ready to tackle the previous daily and record high of early last week at 3130 points:

The economic calendar is relatively quiet tonight with the German IFO survey and some US Treasury auctions to watch out for.

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Comments

  1. Question for the board….. Public or private?

    Am looking at a new job, infrastructure sector in Perth. Loads of gov cash being splashed around at the moment, and both public and private sectors are on a verge of hiring. However, the spend takes considerable time (~18 months (c) ) from announced funding commitments to actually make it to the market, and the work is largely being broken up in larger chunks ($100M average, $500M and above for a few projects).

    Overall outlook for the wider industry in WA is still weak, with mining to be rumoured to be picking up now for 5+ years, but nothing of substance compared to the previous boom. Any engineering labour shortages will probably be short-lived, I think, as people rotate to companies that got work away from those that don’t. Short-term uptick in salaries is likely, but will not be sustainable. Public sector (state), while having a lower salary banding (~10%-15%), looks promising as far as continuous spend. I can find pros and cons on both sides. Would be interested to hear your thoughts.

    • innocent bystander

      have you worked in the PS before?
      some good people but overall mind numbing incompetence, esp at managerial level.
      is job security important to you? family to support etc?

      otherwise, always chase the most interesting work as this can lead to reemployment potentials.
      the times Perth really went belly up (was self employed) I took it as an opportunity to go o/s

  2. China’s Tewoo Seeks Debt Haircut on Dollar Bonds:
    https://www.bloomberg.com/news/articles/2019-11-25/china-s-tewoo-seeks-debt-haircut-of-up-to-64-on-dollar-bonds

    Seems these industries such as infrastructure, logistics, mining, autos and ports are no longer on the government approved favorites list.

    Earlier article on the company unwinding commodity positions.
    https://www.bloomberg.com/news/articles/2019-04-08/china-trader-tewoo-is-said-to-sell-copper-amid-liquidity-crunch

    • Wow… that’s the kind of haircut that stops just above the neck.

      Ouch.

      And to think some people thought investing in Chinese SOE bonds was risk free because the government would always bail them out…!

  3. So now Pura milk is awaiting to be sold. What are these politicians doing about it, they could easily send it all offshore and leave us with the high priced scraps. If this doesn’t stop we will be left without food in our own country similar to how the LNG is sent offshore.

  4. This China thing just. gets. better.

    Uni links with China creating major security risks: New report
    https://www.canberratimes.com.au/story/6510366/anu-linked-to-very-high-risk-chinese-universities/?cs=14225

    Senator claims ‘shadow’ over Gladys Liu
    https://www.canberratimes.com.au/story/6509070/senator-claims-shadow-over-gladys-liu/?cs=14329

    Dormann defends Liu while Morrison defends the LNP’s foreign interference laws as working as intended. Hate to see what they’d be like if they weren’t working.

    • Mining BoganMEMBER

      Geez, she must be disliked by her controllers to be sent out to incite a riot at the risk of her safety. The more she got hurt the better it would have been for propaganda.

      Bet they were annoyed when she arrived back at the office with not a hair out of place.

  5. I live in Bulimba, Brisbane. Old school riverside/inner east suburb that has an interesting mix of squillionaires in their McMansions sandwiched between we plebs in our very nice but cheap and old 1950’s units. Been here a year and apart from having to deal with the 50 yr old yobs driving their ferraris like 20 yr old bogans in commodores it has been pretty nice and free from vibrancy. I see plenty of vibrants when out and about and they’re pretty normal/not so offensive.

    This has made me cringe at a few anti vibrant comments on here as if I knew better and felt maybe some of the shut ins were just hating.

    Oh, how wrong was I, oh so wrong.

    Chinese couple buy house across street. Husband appears to install NBN , wife appears to simultaneously be an escort, do nails, tutor fellow chinese kids, cut hair and any other from home thing she can (all while directing customers to park on my side of the street).

    We have a very dry Winter but just before Spring have a bunch of rain forecast, do they lay their turf then? No. Rain comes, it falls on dry dirt that’s left after their unnecessary landscaping efforts. We reach Spring, half the state is on fire, and Mrs Vibrant dons a sun hat twice a day and waters the fesh turf for hours. We aren’t on water restrictions but that is ridiculous.

    Tonight was the final straw. By pure chance I leave to walk down to the servo for some cola for the bourbon at the exact moment Mr Vibrant is on top of my wheelie bin jumping on the lid to get it closed. I was ready to blow up but, after the incident with Christian preachers from the mall some may recall, I left it to a filthy stare to which a quick retreat was the only reply.

    On my return I inspected the bin, it was a rougly 7L cardboard box of grass clippings in my general waste bin. What a goose. Fortunately for me his work van was in his driveway with the side door open. I kindly returned his waste to inside his van. Reported to my real estate and local council.

    How can someone become an Australian citizen installing NBN and be this much of a goose?

    • Mining BoganMEMBER

      There’s a little public reserve space I wander past most days and it constantly bugs me to see bags of rubbish in there. Not long ago the crows had ripped a bag apart and lo and behold right on top is a discarded post packet. Well, straight across the road weren’t they. Young Asian family with death stare parents. I scuttled off home and grabbed a fresh bag and gloves, picked up the mess and tossed it back into their front yard. Death stares grow stronger over a week or so. More rubbish in reserve. I’d teed a few people up so rubbish was returned to front yard by persons unknown. Death stares going nuclear. No more rubbish in public reserve. Everyone happy.

      Except for the death stares. They’ve started spitting when they see white people. Stuff ’em.

    • Always had friends of many different backgrounds. No issue with most vibrants. But I have a problem with mass migration policy and some of the selfish behavior on display from certain segments.

      My problem is certain individual are turning the place into a massive rat race.
      https://youtu.be/GZB-bXzexxQ

      • This is me as well now. Old mate had the hide to come over and try and talk to me – if he’d opened with an apology and asked if he couod use the spare bin space I may have been slightly understanding but still refused, but no, started out with “It’s bin day tomorrow, it’s all good, etc”. I was just gobsmacked at the audacity, lack of remorse or any idea that it was wrong and finally realised that this is probably a realistic representation of many new Australians, selected merely for their ability/willingness to enter the debt ponzi. Sh!t just got real for me. I gave him a piece of my mind, a lesson in council waste collection rates and rough directions to the dump and a few violent threats lol.

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