Macro Afternoon

See the latest Australian dollar analysis here:

Macro Morning

The big move on the return of Asian stock markets today after the New Year was cut the PBOC cutting banks’s reserve requirement ratio by 50 bps, starting next week which in effect releases nearly $1trillion in funding. At the same time, a drop to 6.96 on the official daily Yuan fix has seen risk assets rise across the region, although the closed markets in Japan negated most of this positivity. 

The Shanghai Composite shot up 1% higher to 3083 points, helping consolidate well above the previously long held 3000 point resistance level, while the Hang Seng Index gapped higher and advanced nearly 0.9% higher to close at 28428 points, remaining well above the previous October 2019 highs:

Japanese share markets remain closed for the new year while what Yen traders are left around the traps are sending the USDJPY pair slightly higher on a correlated risk bid only, still hovering below the 109 handle and remaining hugely oversold after the late December selloff:

The ASX200 had a very quiet start to the year, lifting only 0.1% to close at 6690 points as concerns over the ongoing fires plus the wait until February for direction from the RBA weighed on the market. The Australian dollar slipped on the open, but is remaining just above the 70 handle, where it looks set to break going into tonight’s open:

Both S&P and Eurostoxx futures have gapped higher in anticipation of a strong bid from returning traders on both sides of the Atlantic. The small dip in the S&P500 is quite evident on the four hourly chart showing price ready to jump back into action and bounce off the former resistance level at 3200 points:

The economic calendar reopens with a slew of PMIs from Europe and the US tonight.

Latest posts by Chris Becker (see all)


  1. Good to see someone having a go. Places like Bunnings have sold out of the p2 masks that are all the rage in Canberra at the moment. I recall seeing packs of 20 selling for about $28 on Tuesday but Bunnings now have sold out signs (and Costco have sold out of air purifiers). Government departments were handing them out (or allowing staff to go home) but their stocks also have run out. So it would appear that local supplies are all but extinguished. But apparently one enterprising pharmacy in the city is selling individual masks at $7 a pop (it seems these are not individually wrapped but are being sold out of the pack).

    Also after the fire alarms of numerous office buildings were triggered by smoke seeping in apparently the authorities are resetting the alarms to be far less sensitive. These days in the ACT places like Bunnings and shopping malls have their own internal smoke haze. (but to put it into perspective for most in the ACT this is more a novelty, not a tragedy).

  2. re. Gittins’ article. For me it is hard to read.
    Yes he has partly disowned “small government” & “reform” folly:
    “As someone who, back in the day, did his share of being one of Paul Keating’s pet shop galahs – screeching “more micro reform!” every time they saw a pollie – I don’t cease to be embarrassed by the many supposed reforms that turned into stuff-ups”

    it’s not enough imo. Nothing can be written now to undo the dysfunction caused by Keating disasterism. Let others pick up the pieces.

    Also I still don’t think he has fully cottoned on to the stupidity underlying the “reform” period. eg.:
    “We’ve learnt that “markets” artificially created by governments and managed by bureaucrats are – you wouldn’t guess – hugely bureaucratic, with the managers susceptible to “capture” by market players”.

    Name one “non-artificial” market that isn’t created by the State? And one “non-artificial” market which could exist absent state designation/protection of private property and coordination of exchange. Doesn’t exist. Classic libertarian fantasy.

    • Agree Sweeper albeit I think you let the original thinker and funders of the neoliberal agenda off the hook with all the Keating fat fingering, it was imported you know.

      • That’s true. However I don’t believe it could have happened here without Keating.
        And point is that people who made a career promoting “reform” cannot be part of any solution. Maybe it was over their head, maybe it was good journalism, maybe they didn’t get the linkages, maybe they believed Treasury, maybe they read Friedman.
        Whatever the reason. You. Were. Wrong.
        And not slightly wrong. Wrong about the underpinning issue of the epoch. Vacate public comment to those who can separate reality from zeitgeist.

        • I disagree due to the international national roll out and the reform of international agencies, especially since the U.S. dominance in international affairs and reserve currency. The stacked Nobles is another key highlight.

    • GunnamattaMEMBER

      Yeah OK, we can all see the limitations of neo liberalism.

      Personally I think Gitto can see the end of the road and is getting his share of mea culpas out the way. I thought the piece he loaded last night quite generous in his acknowledgement of the failure of – as you acknowledge – the fundamental underpinnings of much of what he spent a lifetime preaching.

      We could go around the Keating buoy over and over. You wont get an argument from me that the long term outcomes have been disastrous. But he didnt take them there. He inherited an economy which had fried its competitive position with the investment phase of a mining boom circa 1980, blown the federal budget out of the water, and had as dysfunctional set of economic policies going by the time he had his hands on the levers in 1983. Then 13 years later he had a plausibly competitive economy and he had a plausible means of paying pensions. While I do think PJK has lost his marbles I dont in the first instance think we can blame him for the Torynuffs turning compulsory super into a tax avoidance scheme to boost real estate speculation, or Peter Costello and John Winston Howard coughing up a competitive manufacturing sector, to eliminate union concentration around fixed capital investment, with a view to replacing the gigs with low paying services and casualised employment. It wasnt the ALP in the first instance which ran a population ponzi to juice aggregate demand, and it wasnt the ALP which shat out a once respected tertiary and vocational education sector to facilitate these becoming the bain marie offering for foreigners with checkouts manned by millionaire VCs crooning ‘group projects and “markets” are where its at’ – though the ALP has subsequently done nowt to address these.

      The other question at this point might equally be ‘what other path was Australia going to take?’ Keatings own mentor (RFX Connor) blew the idea of state ownership of resources out of the water, and given the trends in the developed world generally, but particularly the UK & US from 1980 onwards, any thought to increasing state control over the economy would have presumably made Australia something of a pariah, quite plausibly starved it of capital at various points post 1987 or 1990 and presumably ended Hawke/Keating and ALP control earlier than it did. When it came to banks they had a near death experience in 1990, and Keating did (Westpac and Packer) explain to them in no uncertain terms that they are either accountable or they arent – and that frightened the shinola out of them for a decade. Can he really be blamed for the banks going ape with housing lending or offshore borrowings or high pressure sales in the 2000s? (when they had a Torynuff government and RBA cheering them on as they did so?). It was Keating who ended negative gearing at one point, it was Howard and Costello who doubled its attractiveness in 1999. Sure he wanted an open and competitive economy, but it wasnt his government which went about signing Free Trade Agreements sight unseen.

      You let your hatred of the man own your commentary too often. What would you have preferred in 1983? Australia take up Albania as a role model? A rerun of Whitlam? A dusting off of Ben Chifley? No (ALP in particular) political leadership gets handed the stone tablet of the one true way to socio economic reform which works for eternity. Bits and pieces of policy work for a time – the time they are brought about – and subsequently get consigned to the economic policy bin, and they make things up as they go and keep a half eye on the longer term if they think they can.

      Yes ultimately many of the changes he brought about have been abused to the point of economic deformity, and that comes at immense social cost to contemporary Australia. Yes the man’s public utterances are all too often caricatures. Yes the man had considerable scope to put people offside. But what he, and the economic reforms he did bring about, did do was buy Australia the period between the basket case economy of the early 1980s and the period when some unknown and unnamed individuals decided to fry the Australian economy in an overpriced AUD, and shove its economic head up its arse to speculate in real while being fattened with vast inflows of foreigners who would grease the educational sector for the right to do so.

      Sure in some perfect other dimension there is no doubt someone better who would no doubt have nailed the economic outcomes of the era better, and lead us all to social nirvana. But anyone with the slightest awareness of the last 40 years (and I am sure you too) knows that if nothing else Hawke and Keating were profoundly human – with failings. For humans with failings leading an ALP which has since distinguished itself with political cowardice and eye glazing ineptitude my personal take is that you cant dismiss the achievements (that disgracefully abused word) of Keating (and Hawke) with the bitterness so obvious in your regular commentary vis Keating, without acknowledging the real source of your bitterness probably isnt the man whatsoever, but the fact he went as close as he did to what he openly stated he wanted to do, and plausibly was a significant factor in a better Australia for a lot of Australians for long after he left power.

      …….and that we have so profoundly rogered ourselves since.

      • I have run through the failings of Keating’s policy agenda over and over so don’t think I need to do it again. And at this point I don’t think many people still believe the Murdoch pitch on Keating.
        And a critique is also a solution:
        – bank deregulation was a a failure. Solution: don’t deregulate the banks
        – privatising the pension system is a failure. Solution: don’t privatise it
        – cutting taxes on the rich is a failure. Don’t cut taxes on the rich.
        So the argument that a hindsight critique is not a policy agenda. I don’t buy it. When the policies are duds, not implementing them in the first place is a far better agenda.
        13 more years of Fraser would have been far better.

        Point was more around Gittins. What’s the honourable thing to do if you are Gittins? I know that’s not how the media works. But it doesn’t make it any easier to read.

        • GunnamattaMEMBER

          Well thats a pretty feeble reply

          – bank deregulation was a a failure. Solution: don’t deregulate the banks

          Yeah, just image the early 1990s and any time since with a heavily state regulated banking sector. We wouldnt have the debt issue, completely agree, but we plausibly wouldnt have invested in anything since the early 1980s and plausibly would have sold a load of derelict banks off for whatever prices we could get, and plausibly would have a corrupt treasury captured by the global banking elite.

          – privatising the pension system is a failure. Solution: don’t privatise it

          Yeah, and just imagine the Torynuffs having run scare campaigns about the budget position emergency every election campaign post the mid 80s, and a world where the upmarket end gets to retire but the downmarket end works onto death, and cant afford to retire because the government funded pensions are so parsimonious. It plausibly would have the effect of not only the babyboomers owning all the RE, and the IR reforms it was part of would presumably mean we all have far more experience of strikes and industrial action (and Union, as well as employer stupidity) then anyone has any notion of in this day and age.

          – cutting taxes on the rich is a failure. Don’t cut taxes on the rich.

          While I may agree with you (and do) just imagine Australia having the highest marginal tax rates in the world any time forward of the early 1990s – and do you really think John Winston or Peter the Hammock master wouldnt have cut them?

          As for ………

          13 more years of Fraser would have been far better

          Wait for the perfect time, after the period from 1949 onwards had seen 3 years of ALP in power …….I get it (either that or you wanted to have 13 plus years of John Winston Howard as Treasurer that history deprived us of)…..keep working on your proposals to nationalise the breweries, maybe form another committee in the interim. Pass my regards to Enver…..

          • “but we plausibly wouldnt have invested in anything since the early 1980s”
            On avg. investment as a share of GDP was far higher in the pre deregulation era than post.
            “plausibly would have sold a load of derelict banks off for whatever prices we could get”
            Compared to? the domestically owned social role model banks which haven’t been sold to foreign interests which we have today?
            “Yeah, and just imagine the Torynuffs having run scare campaigns about the budget position emergency every election campaign post the mid 80s, and a world where the upmarket end gets to retire but the downmarket end works onto death”
            You mean exactly what we have? Sorry, downmarket *& indebted* end works on until death.
            “and do you really think John Winston or Peter the Hammock master wouldnt have cut them”
            So from now on the ALP should pre-emptively implement regressive policies just in case the LNP do it at some time in the future.
            stand by Fraser comment. Howard wouldn’t have lasted and Fraser was a Keynesian in the Menzies tradition. Had the right wing gone to far, an un-gutted labour movement would have at least attempted to keep them in check. And I judge success by measuring results not whether the team is in power.

      • +plenty, comprehensive and clear-eyed. As an aside I think in the early years as treasurer Keating was very good partly because of the quality of people around him keeping him in check – Peter Walsh for one had no time for middle class welfarism – but his grand final was in giving the bodgie the boot. Nowadays he just wants to protect his legacy, not accepting that all the dynamics have changed.

      • And look at the timeline:
        So, when the emergency services depended on taxation, low tax/ “small government” is the way to go.
        Then the ideology is implemented and the emergency services depend on private charity, all of a sudden charity is a gimmick to achieve small government.
        As though social democrats haven’t known that for over 100 years?
        It just reeks of Boris Johnson style right-side-of-history weather vaneism.
        “gamblers with events. They try to anticipate what will happen, to put themselves on the right side of history”

      • I completely agree Gunna … in regard to bucking the trend, long list of countries that had democratically elected governments over thrown or had their currency taken behind the shed for even having a whiff of social anything contra the neoliberal agenda.

  3. Well being and happiness before GDP? Tell em’ they’re dreaming! But I reckon the first political party to break out of the gates and say this is the way forward will win votes. We keep getting told how great GDP is while we go backwards. I think people don’t care anymore. Once you achieve a certain living standard GDP becomes meaningless..

    • C.M.BurnsMEMBER

      move to Bhutan Gav. The only nation on the planet to measure Gross National Happiness

  4. Heres the kouks forcast for 2020.

    AUD to US77c.
    RBA to cut in Feb but possibly hike around Nov.
    ASX 6750.
    GDP growth above 3% by year end
    Infrastructure spending to increase in first half, business and housing investment to increase in second half. Commodity boom to boom on.
    Unemployment to 5.5% by mid year, then under 5% year end.
    Inflation to 2% by year end.
    Sydney and Melbourne houses up 7.5%, all in first half.
    Trump to lose and hawks in us to push S&P to 2900.

    • Yeah nah. Albanese a dead man walking unless he can convince Labor to reject high immigration. Smoco can go on holidays and jingle his wobbly bits whilst wearing speedos, or take photos with the cricket team, and it won’t make any difference.

    • GunnamattaMEMBER

      Interesting you say that……

      I wrote the below to a mate this morning

      At the moment I seem to get the impression that our PM Scott is desperately hoping it all blows over quickly, and feeling every minute of the distance since reelection. he has become an object of widespread ridicule and I find myself wondering at the moment if he will last the full term.

      He is already widely loathed in Victoria and I reckon if there is a major bushfire outbreak between now and the end of March, and you would start to see local Liberals (and he is already seen as a pro Sydney man) distance themselves from him. My take is that the economic data from Christmas will be starting to stink up the news flow by the end of the month. Right at the moment the iron ore price is holding up OK, but I am still expecting that to tail off significantly through Q2 this year, and I cant see any plausible way for employment or incomes to improve. For mine that has him and Frydenburg trying to sell a budget in May, against the backdrop of the economic macro looking weak to feeble, trying to be tight (but only ‘achieving’ any sort of balance with forecasts on wages or commodity prices which are dubious) with an electorate already giving him the fingers. That is without any further event being added to the mix. I have a cousin up on the Edwards river western NSW telling me they are already looking at algal blooms, so I figure another embarrassing look at Angus Taylor is in the offing – though I do find myself wondering if time hasnt come to tell the cotton farmers on the Darling and rice farmers on the Murrumbidgee that the time has come [though I dont think this government will be the one to do that] or spend the billions for desal plant driven flows down the Darling basin and pricing them out of existence anyway.

      To me it appears that Boris Johnston is now about to start spending in the UK. I reckon the Libs here need to find someone to do the same (I dont think Scomo is salable in that sense). That said I have no idea what planet the ALP is living on either. For mine they are all still wedded to the ‘low tax, small government’ neoliberalism of our age, and havent quite twigged that that mindset has actually been floating face down in the water since 2008. Ross Gittins wrote a poignant peice in the Fairfax press today which I think goes to the nub of it

      Why I didn’t donate to the Rural Fire Service this time around

      • SnappedUpSavvyMEMBER

        In a perverse way the only joy I have at the moment is that it WILL go to custard on the most arrogant man and worst PM we have ever had ( I know big call but SmoCo has beaten Rudd which is a big Chunt achievement )

        • He’s certainly up there for an award, but some people still think he’s ok. Somehow? I am very confused by this, since I have thought he was a smug cnut from the start. But I think your average voter is slow to catch on.

    • I loathe the fella, but I find the ScoMo bushfire blame tenuous (dumbass Hawaiian holiday aside). What I do find interesting is the apparent heat he’s copping (pardon the pun) is coming from the electorate, and either garnished or fanned by the media. Almost none of it is coming from the opposition, so it’s notable in that sense.

      The country is largely no better or worse than when we just re-elected the bloke, and nor has he changed character in any way. Buyer’s remorse maybe, but we can be a self defeatingly fickle bunch.

      • Wrong, he isn’t blamed for the fires. People are angry because of a lack leadership and support. As Ross Gittens article shows. The Feb Gov is busy cutting funding to create a surplus and focused on tax cuts for the already wealthy while penalising those who need money most. Welfare recipients and charaties etc..the scorn is because people are finally seeing through him and his shiny suit and empty words. Sitting on a beach in Hawaii and pawning off responsibility to others like the state Governments and not supporting volunteer fire fighters who are making the biggest sacrifices whilst not being paid half a mill a year like SmoKo is, who was elected to wait for it “lead”..

        Personally the man makes me sick to my stomach. If ScoMo represents Australia to the world. I don’t want to be Australian anymore..

        Also don’t forget the climate change denial, coal support and total inaction on climate policies and blatant lying about what is being done on a Global stage. So whilst the residents may be confused as to exactly why they are angry. They have plenty of reason to be and why their venom is guided at him is totally justified.

        • I picked up these feelings at Christmas around my western Sydney bogan boomer extended family – Smoko has failed miserably to pick the correct action/reaction to this disaster. Though the bogan boomers are still a long way from wanting real climate action. Smoko’s image has taken a hit but he’s a long way from cooked.

          Also, I don’t think the gap between Sydney/Melbourne and regions (even popular holiday spots) has ever been bigger. Sitting here in Western Sydney, I’m not sure many people on my street really relate to people in Cobargo the same way they did when the area was homogenous whitebread.

        • GunnamattaMEMBER

          I sent a load of photos garnered from twitter yesterday to people working at 3 different news outfits based in Europe. I also sent them the one I loaded on yesterdays links with ScoMo in parliament with a chunk of coal.

          One of them replied that the photoshopping in the ScoMo coal in parliament shot was so well done they couldnt tell it wasnt real……

          • Haha omg that just shows the rest of the world really doesn’t understand our reality, with respect to your Photoshop story.

            Anyway I’m sure you’re now aware of the Cobargo incident. Even the ABC live is now covering it but boy Did they let loose. I can’t believe he picked up the hand of the woman who didn’t want to shake his. Interesting she didn’t pull her hand away which is what I would have done instinctively. One thing I learnt coming back to oz from a much more touchy feely China is that you do not touch people in general interactions here, even people you know. Anyway my one hope is that is the geographic expanse and all round horror of these fires are widely reported everywhere, esp in our largest migrant originating countries and that our recent migrants are shit scared and word filters back home. I want people choosing to migrate to Canada instead of here. I want Australia to become synonymous with fire. I want the harsh unforgiving reality of existence here to seep into the consciousness of those inclined to migrate that no where in Australia is safe from fire or it’s effects. I may be an optimist but that’s what I hope will be of outcome of thesefires. The other outcome is that maybe the general public can force our governments to improve certain climate related policies

          • yep. lol
            no one outside Oz will believe that we are capable of voting such fckwith into office.

  5. Speaking of fires and year of the rat. This video was shared yesterday, but I implore MBers to view it. It’s worth every minute, not just because it talks of the runner Carlos Ghosn made but because it also talks about the emergency minister for NSW fexking off to Europe on Holiday like ScoMo.

    I tend to agree this country has become sh1tsville. The year of the rat is a good title..

    • watched it yesterday and subscribed to his channel. His way with words.. I start to think he is our Mining Bogan.

  6. I’m an engineer. I’ve spent most of my life building complex things. The greatest compliment I can give to a device is that it is “fit for purpose” meaning that it fulfills its designed functions efficiently and effectively.

    Scott Morrison is Not Fit For Purpose. #NotFitForPurpose.

    Please spread the love.

      • He didn’t even stay to listen. He could have asked the less to switch off and just let these people talk. Interview them after I’ve gone and let them say about me what they will, but give them time to just talk to me with the cameras off.

        • Shameful. Hopefully people share the sh*t out of this and it helps Scummo’s status in the party go from daggy dad everyone is willing to take a punt on to electoral poison and they knife him…

      • The way he slinked off in his flash new BMW provided a good bit of symbolism. After the Libs killed the car industry and those shiny expensive new BMWs look out of place in a rural town where people probably live below poverty line. As the woman rightly said, they get nothing in that town and the focus is on appeasing Sydney and then Melbourne.

        Hard to feel sorry for SmoKo he’s not a leader, just a man that plays politics for political gain of himself and his mates.

        • master of toilet paper

          heaps of ppl in povo rural towns drive huge ass utes and 4wds that cost as much as a bmw.

          • Not so much down here Stags. Nice as they might be, the Euro bling signalling doesn’t work so well in these pockets either.

      • TailorTrashMEMBER

        Definitely not a sample of his quiet Australians ………..liked the way he did a reverse pope manoeuvr with that girls hand ….grabbing an unoffered hand for the cameras looked pretty bad

      • No, it’s not all his fault, but he chose to do what he though was the thing to be Seen to do. Another poorly orchestrated spotlight moment. Gladys would’ve got the same – has she ever even stepped outside Sydney yet? They’ve just been through hell, & are hurting hard, understandably! Forcing a handshake from a clear hostile – WTF? From a dope with NFI – Where’s the people skills? How Poor is the Form. Every other day there’s another example of poor judgement from this goose. I doubt he’d ever get a warm welcome in a lot of these poor pockets down this way before this went down, probably never been to any to even know they exist – thank his crony minders for shrouding/perverting his reality. But now, after Hawaii etc – Gav nails it to a tee!! But I don’t think the feds from any gang understand the utter lowly disgust they’re held in. Greens are gone here! Libs are gone too! & Labs are MIA. NSW = Newcastle, Sydney, Wollongong – has for MANY FCUKING DECADES!

        • Stone the Crows

          The local facebook message boards are full of anger, frustration and vitriol. SmoKo walked unwittingly into Cobargo thinking he would look like a man of compassion and once again has been left looking and smelling like a steaming pile of sh*t…..

  7. The Traveling Wilbur

    The big move on the return of Asian stock markets today after the New Year was cut the PBOC cutting banks’s reserve requirement ratio by 50 bps, starting next week which in effect releases nearly $1trillion in funding.

    So Santa does wear a red suit and a fumny hat after all. And all these decades we just thought it was some Coca-Cola marketing scheme gimmick!

    Xi, that’s awesome.