Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Everything is awesome as the Tories look set to wipe out any chance of the UK remaining both in the EU and in, well union as risk takers take the cue that the US/China trade deal is done as well, sending the USD down against almost everything but gold. Stock markets have responded to the big breakouts in overseas markets with a sea of green across the board to finish the week. Here comes Santa Claus! (although he’s the same rotundness, he looks more orange than white….)

The Shanghai Composite is up over 1.2% going into the close to significantly build above the 2900 point level , now at 2951 points, while the Hang Seng Index continues its own breakout, now up over 2% to 27551 points:

Japanese share markets are no longer wavering, taking the cue from a mammoth selloff in Yen to shoot higher, the Nikkei 225 about to close some 2% higher at 23979 points. The USDJPY pair is up over 100 pips here, almost taking it back to the previous weekly high and capping off a very sideways weekly session:

The ASX200 was the comparative loser, gaining only 0.4% to build well above key support at the 6700 point level and looking to close near the 6750 point level. This is due to the rise in Aussie dollar which continued from it surge overnight, now finally breaching the 69 handle, and setting up a new trend going into the Christmas trading period:

Both S&P and Eurostoxx futures are up significantly going into the European open with the S&P500 four hourly chart showing how last nights repudiation of  strong resistance at the 3150 point level is going to built upon further tonight – damn the torpedoes and here we go:

The economic calendar finishes the week with US advanced retail sales and a private oil rig count. Have a good weekend!

Comments

  1. Gold stocks got hammered today with RRL and SAR taking large hits. It seems local traders believe god price will get smashed overnight and shares of gold companies will fall even lower on Monday.
    All because there is a “deal”. Will see how this pans out and if the deal will be enough EU, US, Japan, China and rest of the world not to need any QE. Perhaps even IRs may start to go up because of the deal.

    • Buy the rumour sell the fact. A deal is now priced in. Is there more upside or downside from here…?

      • both shares are trading at levels when gold price was around $1250 and when they had lower production and naturally higher costs. RRL flash crashed once about 10c but recovered within 30-60 seconds.
        SAR is now holding an asset that will have high cost for 3.5 years ($1470 per ounce) which will bring their total AISC to ~$1250 per ounce but that is still low cost producer. This is their Super Pit acquisition. It will 245k ounces of gold at $1470 per ounce and SAR last week hedged 200k ounces at $2100.

  2. So, when do we see pen hit paper and Trump scrawl on this deal?

    Surely it will be a bigger than Ben Hurr event in the oval office when it happens, as the greatest deal ever by the greatest president ever in the now very great again country does the deed?

    • It turns out the “deal” is actually a final offer by the US. Everyone now awaits to see if China signs it. from Reuters with love.

    • No cvnt pollie is gonna touch nuclear until that number gets towards 90%. Too much scare campaign fodder.

      Until then any time you see it raised, you should remind yourself it’s either ring used as a distraction or a wedge.

    • Great Jacob. You have just volunteered your back yard for the waste disposal dump. I am sure your neighbours will be thrilled.

      All current nuclear power stations being built in the west are running much over time and over-budget and are supported by government guarantees. Err, that suits Oz down to the ground 🙁

      • Waste disposal believe it or not is relatively easy*. It’s every other part which is bloody hard (as you have noted).

        * just need to be good at very long term planning… how’s our track record on that as a species? 😉

    • Do you seriously think a Government that was dragged kicking and screaming to spend $11m on additional fire fighting assets is going to splurge billions to support a nuclear power plant? The cost per kilowatt hour will make any nuclear plant unviable.

  3. Even StevenMEMBER

    Chris: what is the logic of a sell-off in Yen pushing the Nikkei higher? Thanks. (Also open to anyone else who can explain)

    • Samuel VigoursMEMBER

      The weaker Yen is good for all exports; if you’re selling cars to the U.S. for US$20,000 each, and the Yen drops, then that US$20,000 will buy you a whole lot more Yen.

      For the same reason (but opposite), the higher AUD has muted the ASX200.

    • Sounds backwards to me.
      A higher yen punishes Japanese export competitiveness (earnings) hence the export manufacturing exposed stocks (and possibly the broader market) are down?

    • Edit. Chris has it right, Weak yen is good for export manufacturing profits and competitiveness. Also domestic stock prices.

    • Even StevenMEMBER

      Thanks Samuel and cee. Makes absolute sense for any export dominated country. Exporters will do well. Presume the effect will be much, much weaker where a country (Stockmarket) is not trade exposed.

  4. SnappedUpSavvyMEMBER

    Looks like the world will end yet again with the latest brexit vote – have some of our resident snowflakes ever come out of their safe space after last time

    • Eh … looting proceeds apace and profits off shored … chlorinated chicken in every pot …. chortle …

        • End times – ????? – who said that. What I said is trade shocks are bad stuff and stand by my perspective about how incressed neoliberalism will play out in 12 mo let along longer term ramifications for the mopes. You seem to be narrowly focused on some market movements in response to gleeful investor sediments about unleashing the looting kracken … hell of a world …

        • Unfortunately he is right.

          Wait until the two great bargainers get down to the trade agreement. This is the Don’s big chance to strut his stuff and Boris gets giddy on his victory laps.

          Drugs and ag products will be top of the list and will need greatly reduced standards to get in.

          • Its like Gitmo … austerity under Tories to protect capital valuations, makes the mopes cross and all one needs its a scapegoat, ones they imported to loot wages to begin with, something about nascent colonialism and endless wars motivating some to move where the bombs are made and not dropping from the sky.

            Don’t know might be a day trader conditioning thingy, sorta like the pokies ….

          • The EU is Ordoliberal for the most part, ramifications of the U.S. dominance in economics and the U.K. cake and eat it too inclusion. That said the U.K. just voted to bend over to the U.S. deeper than with the Atlantic treaty, though I wonder if some deal might be hashed out to save the City of London’s function under the guise of trade of goods or services.

            The whole E.U. Russia, China thingy would kill the VoM thingy ….

          • Peachy clocks off MB on the weekends. She’s a high class dominatrix madame with a penchant for pegging Greens senators.

        • Lmmao … since Thatcher held Hayeks book up high and swore fidelity too its words the U.K. has been hollowing out itself and genuflecting to its masters in the U.S., even the labour party went third way so its polies could jump on the life raft of revolving door …

      • Most people don’t know that chicken meat is washed in chlorine. Because they are raised in such filthy conditions it’s the only way to ensure it’s not covered in bacteria.

          • FSA, the European Food Safety Authority, recognises that ‘’(the) public health benefits of controlling [zoonotic pathogens] in primary broiler production are expected to be greater than control later in the chain as the bacteria may also spread from farms to humans by other pathways than broiler meat”.

            Fighting bacteria at each step of animal farming is more efficient, as it prevents contamination in all forms of transmission. Take the example of the food-poisoning inducing bacteria campylobacter. Handling, preparation and consumption of chicken meat may only account for 20% to 30% of human cases of the disease caused by this pathogen. By contrast, 50% to 80% of cases may be attributed to the live chicken “reservoir”, even though the transmission pathways are not yet well understood.

            This is why we believe the European approach to meat safety is more efficient in protecting public health.

            What is more, as long as good hygienic practices are complied with and food safety management systems (HACCP) are well managed by food business operators – as required by EU law – there should be no need for additional treatments of meat.

            Essentially, what we are concerned about is not just the chemical itself, but rather the risk that these treatments will be seen as the “easy fix” to clean up dirty meat. Let’s be clear – no chemical rinse will ever remove all bacteria from meat heavily contaminated as a result of poor hygiene.

            It is also important to bear in mind the slaughterhouse workers among whom the risk of respiratory diseases after inhaling poultry chemicals could increase.

            Then we have the risk related to the emission of chemicals into the environment via poultry plant’s effluence.

            European countries have taken the lead in raising healthier poultry. Of course, there is room for improvement, as the fight against meat-borne illnesses is not won yet[1]. But the EU has chosen an approach which is scientifically sound, has proven its efficacy provided it is properly applied and – most importantly – achieves its goal without the use of chemicals. We should not and cannot sacrifice public health levels and consumer protections in exchange for negotiating advantages in TTIP.

            At the end of the day, it’s also important to take into account what consumers want. Consumer research in European countries such as the UK[2], Finland[3] and Denmark[4] show the overwhelming majority of consumers have no appetite for chicken washed in chemicals.

            https://www.beuc.eu/blog/what-is-wrong-with-chlorinated-chicken/

            No fken clue ….

          • Against the entire methodology and incentives that promote the necessity to use such chemicals to make a profit.

          • Interested PartyMEMBER

            butt-hurt…huh?
            A few years back I refurbished older mining accommodation camps….including dry messes. My statement is 100% fact.
            Sorry for the let down…troll harder, or get better at it.

          • Cmon IP share your inside knowledge on the Epstein case. Been waiting months to hear what some numpty in FNQ knows that no one else does. You stated with such authority that all will be revealed yet have produced nothing. I may be trolling but I really think you need to pony up with some real evidence for all these “facts” and things that only you know and hint at but won’t reveal.

        • But here in Australia, NOT being washed in chlorine is a major marketing point for several chicken brands. Go figure.

        • I’m for it. Salmonella is not pretty, even less so in your children.
          Half life of chlorite is 14 min or something like that.

  5. Also I’ve got this energy thing fixed.

    Borrow a nuke from Donald, crater in the interior.

    Contact these guys to fill the crater and set up the battery. (https://redflow.com/)

    Surround with PV, or solar steam turbines, whatever floats your boat.

    Charge this in the day, surplus goes HVDC everyfn where, export the remainder to Singapore or Indonesia or Kiwis or run massive desal plants for intensive stacked agriculture/aquaculture

    And put a million drones on charging pads around to protect it from dutto.

    Bobs your incel. And I bet it would cost less than the poodle’s subs, even if we used Jims Digging to dig the hole.

    Next!

  6. I’m a little tired cooking birthday cakes (not a euphemism).

    Can someone explain this? Simpler the better.

    Is it leave voters having second thoughts to cause less of a swing? If so what caused the overall swing?

    Oh man so complicated.

    However, the swing in the Tories’ favour varied dramatically across the country.

    In those seats where more than 60% of voters backed Leave in the 2016 EU referendum, the increase in Conservative support on average was 6%.

    However, in those seats where more than 55% voted Remain, the party’s vote actually fell by three points.

    In contrast, Labour’s vote fell on average by as much as 11 points in the most pro-Leave areas.

    Its vote fell by only five points in the most pro-Remain ones.

    https://www.bbc.com/news/election-2019-50774061

      • To my shame I couldn’t really be @rsed this year so i have done twin butter cake bases, used pink colouring, will do vienna cream in the middle, she wants yellow. And probably ice with shop frosting because it’s painful to make that much icing.

        Daughter can then decorate with sugar roses etc from woolies

        So will be pink butter cake with yellow vienna cream filling and rolled icing decorated by daughter using sugar ornaments.

        But no theme. What a hopeless dad.

      • My Mixmaster engine burnt out, so I used the hand electric mixer, which actually seemed to be better.

    • Brexit fatigue; to uphold a promise; and Labour’s equivocation on Brexit and its economic policies. But only in England. In Scotland and NI different.

    • In the remain seats both the Tories and Labour lost votes. Labour just lost more.
      In the leave seats the Tories got a boost and Labour took a tumble.

        • This is just based on a few things I came across during the week. Prior to the election the big issue was Brexit. It was no longer whether or not it should go ahead but just getting the damn thing done. While Boris wasn’t impressing most he was at least certain with what he wanted to do. Corbyn and Labour weren’t committing to anything with Brexit and were attempting to run more on an anti-austerity / anti-neoliberalism platform. If Corbyn had said something along the lines of “We are a democratic nation and therefore we need to respect and uphold the result of the Brexit Referendum. If Labour is voted in we will get it done while always putting the interests of the UK first.” They may not have lost as many votes. Or they may have lost more as it is thought that the Remain vote makes up a large part of their voting block. Any way it is looked at it sucks to be either JC or BoJo. It’s a mess that I’m glad I’m not involved in trying to clean up.

        • Perhaps, I heard that they were only running in seats held by Labour. I’m waiting for Mark Blyth, or someone of his ilk, to give me the rundown.

      • The winner who deserved/earned it the least is Nigel F. I wonder if his wife will keep working for the EU 🙂

    • Simples Harry. Some normally pro labour areas were also heavily pro leave. They have now gone Tory to ensure Brexit gets done (whereas Labour is seen as getting in the way of Brexit).

      Vice versa in pro remain areas.

    • “Is it leave voters having second thoughts to cause less of a swing? If so what caused the overall swing? ” – The BBC crap is irrelevant as it is meant to mean nothing but to highlight the establishment did not spill enough blood.
      MSM is devastated that Labour did not lose as many seats as they wished despite working so hard to make sure Labour loses over 80 seats and Corbin loses his job. Corbin’s resigning is not enough for the psychopaths.

      • MSM is devastated that Labour did not lose as many seats as they wished despite working so hard to make sure Labour loses over 80 seats and Corbin loses his job. Corbin’s resigning is not enough for the psychopaths.

        Nikola mate fcken, I’m not sure that statement is true.

      • Totally agree with N.

        Led by Murdoch and the Boy, the MSM / Red Tops / bare t*ts were very anti-labour. Corbyn, unfortunately, got the same treatment as Shorten.

        The biggest question now is who wins the biggest liar prize – BoJo or Scummo.

        • Give it a rest. Corporatist globalist hyperurbanistas are seriously on the nose without any help from an unwatched media.

          • Morgs. A typical rightwing reactionary freeloader. Too miserable to pay a subscription.

            Just like your heroes “Corporatist globalist hyperurbanistas ” The joke is you are one of them.

            I am just a retired dairy farmer who is a self-funded retiree being screwed by the FIRE sector.

          • The hayekian nightmare the dairy farmers have lived is much more linked to neoliberal hyper-urbanisation than many realise. Have spent many years living in regional areas and watched (and lived) the decay. But you would be wrong if you think the city dwellers have escaped the extreme growth dystopian nightmare that the globalists are selling. They didn’t vote for BoJo, they voted against corporatist globalisation, the same globalisation that sucks the blood from our farmers. BoJo, like Trump, is the only one selling that story. With the emphasis on ‘selling’.

    • Do you dress up like Marie Antoinette and say “Let them eat cake.”when presenting the cake to your daughter and her friends?

  7. wife went out on Christmas party from work, son went out with girlfriend, Nick on his first beer with his dog – bitzer – mother half sharpei, half cattle dog and father alascan malamute.

  8. So ECB wants to have a mandate to deal with Climate Change. I always new that next EU stimulus will be aimed at renewables but did not expect to be lead by ECB. It seems Lagarde wants to get the mandate to drive this. If they go ahead watch out.. Rare Earth, Nickel, Lithium, Zinc ect.. buy with both hands.
    Also interesting article I read today was that EU is suing Indonesia because Ind does not want to sell raw Nickel to EU but want to be involved in downstream production. Stupid EU haven’t they heard of Australia?

    • I posted on this, its front running for capital to create out of whole cloth another asset class and ring fence more natural asset formation into a price mechanic for the market to own aka ready for air to be monetized.

        • http://www.theartofannihilation.com/the-global-climate-strikes-no-this-was-not-co-optation-this-was-and-is-pr-a-brief-timeline/

          From the Trade and Development Report 2019:

          “The OECD estimates that institutional investors in member countries hold global assets of US$92.6 trillion and while figures for institutional investors in developing countries are harder to come by, estimates for the assets held by Brazilian pension funds exceed $220 billion and some $350 billion for combined African pension funds.”

          Beyond pension funds, this is a plan to take global public assets (the environment) and monetize them. “Second, “de-risk” private investment and maximize the contribution of development partners by joining up regional and global “platforms” to boost investment, primarily by creating new large-scale asset classes, such as “infrastructure assets” that can be “securitized” by bundling high- and low-risk loans into new and “safer” financial products.” – snip

          NC commenter that works in banking was just at the FT banking piss up and all the financial types were adamant the whole thing had to get the FIRE treatment, just as stated above, especially more dereg and sacred cow investors – not to mention no holes barred pay packets for innovative executives – goats distribution.

        • Then some wonder why day traders are such pidgins in a Scott’s box full of metaphysical conditioning to normalize the behavior of their betters ….

      • Jumping jack flash

        This.

        Carbon backed currency.
        Fiat is fake by definition, it’s in its final death throes, and could never work at best. Once everyone got a taste for debt its fate was sealed.
        There’s not enough gold or pm to support enough currency for the planet and “endless” growth.

        But possibly there’s enough atmospheric carbon…

  9. Watching dogs bollocks on TV: 9HD. Really, is that what they thought we’d be watching when TV was invented?