Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

The risk complex is reeling from higher tensions in the Middle East as a top Iranian general is killed, with oil prices spiking considerably in the wake of the attack. Stocks are generally down in the region, although the local market was spared while gold also spiked higher on the tension.

The Shanghai Composite is putting in a scratch session, currently down only 0.1% to 3086 points, still well above the previously long held 3000 point resistance level, while the Hang Seng Index has retraced slightly to be down 0.3% to 28461 points after advancing earlier in the session:

Japanese share markets remain closed for the new year while volatility in the thinly traded USDJPY pair has shot higher as the pair falls below key support at the 108 handle in the wake of a possible risk off move overnight:

The ASX200 was the best in the region due to a much lower Aussie dollar, gaining some 0.6% to finish the first trading week at 6733 points.   The Australian dollar fell back below the 70 handle finally, as USD bids on safe haven took over the already poor sentiment and wiping out the last two weeks of gains:

Both S&P and Eurostoxx futures have reversed course after the ebullient sessions overnight with the S&P500 looking to retrace its New Year gains in what could be a volatile session to end the week:

The economic calendar ends the week with two pairs of very important releases. First German unemployment and CPI for December, then in the US its the ISM manufacturing and DOE oil inventory report. Have a good weekend and please stay safe in these troubled times….

Comments

  1. Carlos Ghosn

    fled his Japanese home in a musical instrument case, in an audacious Hollywood movie-style escape masterminded by his wife

    Dude…

  2. Seems like the Quiet Australians have realised they elected an actor for PM. All thanks to journalism.

  3. The Traveling Wilbur

    Apparently this whole flare-up in the middle-east is Smoko’s fault. Informed sauces are saying that he rang Trumpo to ask him to provide some media distraction cover while the fire crisis continues to run in Australia, and Trump being Trump only heard the words “coverage”, “fire”, “media” and “I ran” and jumped to the wrong conclusion as to the kind of distraction Smoko had been hoping for.

    Allegedly. 😉

    • Is Smoko attempting to win back the women’s vote? First the dick togs and now a moose knuckle. Boardies and a pair of jocks please.

  4. The Hollow Man has been reported as saying he “doesn’t take it personally” that people are enraged with his handling of himself as a leader during the fire crisis.

    Fvck me Mr Nowhere Man, you should take it personally. It’s fvcking personal and it’s about you

    • It it weren’t so serious right now, it would actually be funny. But the WHOLE FECKING COUNTRY IS BURNING! I’m waiting for him to say, look it’s all too hard I’m off to Hawaii. I left Sydney on the 22nd of December and thought, this is great I escaped all the smoke over Sydney, only today to watch it covering Melbourne.

      I really do hope though, that this is it for Australian’s, this is a defining moment where collectively we say no more and elect people who will actually do something to turn things around an invest more and more in renewables, imagine a leader with a spine who said, we will no longer sell coal offshore, it stays in the dirt.

      Yeah who am I kidding?

      • rob barrattMEMBER

        “Leaders with spine?” We only elect invertebrates. But just what intellects they have eh! You can’t help but admire them. Captain Bligh – direct from QLD Labor PM to bank executive – Impressive.
        Jackie “London, Paris & New York” Trad. Socialist extraordinaire. Wasn’t aware (???) of her lawyer husband buying a property in a zone planned for development as she was away to the above on absolutely essential government business (ho ho ho) ….
        And that’s just Labor!!!
        Mind you, if an accidently elected vertebrate WERE to say “our coal stays in the ground” China Japan etc would be buying it from the Brazilian invertebrates faster than a Dago can spit.
        Never going to happen. When the first Swiss banker starts to choke on smoke in his palatial villa on Lake Como THEN something might…

      • I really do hope though, that this is it for Australian’s, this is a defining moment where collectively we say no more and elect people who will actually do something to turn things around an invest more and more in renewables, imagine a leader with a spine who said, we will no longer sell coal offshore, it stays in the dirt.

        And the only thing the MB commentariat would be asking is “but what about immigration”.

        • Well to be fair it’s still an issue regardless of if this country burns fossil fuels or not the land has a natural carrying capacity and water shortages will become a new norm. Plus housing affordability is an issue, along with Environmental degradation caused by urban expansion. Plus where are we gonna accommodate all the new Jimmies? In the Blue Mountains? Down Gippsland way where all the fires are? Part of me would have no issue with immigration if I felt these issues could be tackled properly, but also there is the cultural impact, too much too soon and it changes the vibe of the place.

          Like the Great Movie The Castle, “I’m starting to understand how the aborigines feel”.
          https://www.youtube.com/watch?v=qFr2Gh6yIyQ
          When suddenly we all arrived and ruined the vibe of the joint and displaced them.

  5. Question for anyone who has used CurrencyFair before and in particular the exchange…
    I have 2 months to transfer a chunk of euros to $AUD. I want the best possible rate (obviously)
    https://imgur.com/a/2ygnkcN
    I can set the rate up (above current rate) or down (below current rate) or in between (goldilocks).. my thinking is, if I set the rate high people looking to exchange quickly may accept the higher rate and transfer. This may take a while to complete (but I have time on my side).

    I am wondering if anyone else has done this before and what kind of wait times did it take to complete a transfer for you (when you set the rate higher than the average)? Did you ever set an overly ambitious rate and the transfer just didn’t happen for weeks?

      • Hmmm the rates on CurrencyFair seem better to me. But thanks I will look at them also. I’m going to transfer both Euro and USD in relatively large quantities and small percentage differences can be a few $$$ in my pocket.

          • Bank (esp. Big 4 exchange rates) are almost criminal. Difference of $10k or more in some cases…

    • darklydrawlMEMBER

      OzForex used to be worth a look. It’s been a whle though so there might be better options out there. Just avoid using the banks! The savings are in the thousands.

    • I use currency fair a fair bit. Highly recommended. I don’t think the counter party determines the exchange rate. As far as I can tell they simply give you about 40 pips off the mid market rate and so if you pick a rate of your own you just have to hope it gets there during fluctuations. But I could be wrong about that. I

      Anyway I’ve never found a better rate from anyone else, especially in such an easy to use platform.

      My regret-minimisation strategy is to exchange in two or three chunks each a few days apart (you could even do weeks), that way you even out the bumps a bit and you “win either way” whether it goes up or down in between.

      • Thanks, I’ve used CurrencyFair before for smaller amounts, but this will be the first time over $10k. My Irish bank won’t allow me to move more than 10,000 euro per day anyway it seems, so i’ll have to do this piece meal.. what a PITA.

    • Arthur Schopenhauer

      Gav, depending on the amount you can get a half decent rate from the big 4. You have to deal directly with a/your bank manager though. As a regular customer you get fleeced.

  6. Mining BoganMEMBER

    I wish to register my discontent over sales. Xmas sales. Boxing Day sales. New Year sales. I had a list and a war chest. Sporting equipment mostly. I knew what I wanted…been building my list over the last three months…and I lurked with intent. Nothing. Not a thing I wanted came on sale except for some spectacularly ugly purple and lime tri gear for training. The rest of the sales were a bust.

    So the thing is, all these folk buying at these non-event sales. Are they just buying junk because it’s cheap? Stuff they’ll never use because it’s 70% off? ‘Cause there’s nothing worth buying in them…

    • According to the ABC’s War on Waste, most of it’s in a landfill by the next month… fast fashion, crap really.

      Sorry, a month is not quite right:

      The average Australian spends over $2000 on clothing and footwear ever year and nearly 60% of all clothing produced globally ends up in landfills or is incinerated within a year of being made.

      • Mining BoganMEMBER

        That is appalling. Speaks volumes about us though.

        Wait! $2000? Seriously? I’m gonna do some add-ups. Be right back.

        • Wait! $2000? Seriously? I’m gonna do some add-ups. Be right back.

          Yeah that was my reaction as well, but sitting down and thinking about it – it kinda depends what they class as “clothing”.

          Eg: I’ll get 10ish years out of a motorcycle jacket (don’t ride a lot these days, so probably more like 15 from the current one), but you can easily spend $500 on a good leather one and $350 on a fabric and it’s pretty common to have one of each. Draggin’ jeans (or similar) are another $200-300/pair. $100-200 for gloves and similar for boots.

          A suit can cost as much as you want it to, and even if you’re replacing it (/them) fairly infrequently it’ll still be a relatively big expense that year. Similarly a good pair of shoes (ie: to last years) generally costs $hundreds.

          But most of my casual clothes – T-shirts, jeans, shorts, etc – are years old. Heck, my go-to shirts for “dressing up” (as much as I am prepared to) are 15-20 years old.

          I believe school uniforms for kids can get spendy and they’d need to be renewed at least once a year. Same with shoes, soccer/footy boots, etc. Fortunately we aren’t there yet.

          That said, while there’s undoubtedly some infeasible expensive shoppers dragging that average up, I’m sure a large chunk of it for the typical punter is spent on cheap crap at Target, etc and only worn a few times. My mum volunteers at Vinnies and the amount of clothing they get in that exactly fits that description is mind boggling. They literally can’t shift it and end up throwing a lot of it out. Our two kids are pretty much exclusively dressed in stuff from Vinnies that would otherwise have been thrown out, then fed back into the system when they grow out of it. It would have cost a decent chunk of that $2k/yr to buy it new.

          As an aside, it’s a bit frustrating that there’s not some clear and easy ways to get “old” clothing into the hands of people who really need it – homeless, etc.

          And if you really want to get mad, here’s an apropos triumph of capitalism over morality: https://www.vox.com/the-goods/2018/9/17/17852294/fashion-brands-burning-merchandise-burberry-nike-h-and-m

          • Mining BoganMEMBER

            I buy my motorbike gear second hand. Never paid more than $50 for draggins. There’s also a place near me that buys up year old style gloves, shoes and jackets from the big chain stores and sells cheap so about $100 for boots and maybe $150-200 for jackets.

            As for those bastards burning perfectly good clothes…

          • I now can’t get rid of my mental image of Mibo dressed as Freddy Mercury in “Crazy Little Thing”.

            Or pushing his electric lawnmower around in “I Want to Break Free”.

      • Mining BoganMEMBER

        Brooks Ravenna running shoes (superceded model) $150
        2XU running socks(sale) x2 $30
        Bonds underwear (they suck since going offshore) x6 $80
        Salomon Speedcross trail shoes (frequent flyer points) nothing
        Tshirts nil. Oh, two tech shirts that I got gratis for entering race series so not counting.
        One Salomon waterproof trail jacket ( it’s a wizard bit of kit) $160
        Do cycling gloves count? One pair $40
        Running shorts x2 $35
        No jeans
        No nice clothes
        No new golf gear
        Compression shorts x2 $60
        Purple and lime tri shorts x2 $50
        One club trisuit + club tech shirt that makes my nipples bleed $200

        Can’t think of anything else.

        $805

        That’s too much. Must. Cut. Spending.

    • Perhaps a change of mindset is required. A friend recently told me that he does two things. Firstly, he has an account set up and anytime he wants to buy something he transfers the cash across to it and begins waiting. Then, if it gives from a momentary want to something he needs or will actually use he asks whether he could afford to buy 5 of them and not be fussed. If the answer is yes then he just buys it. Sales be damned.

      • Mining BoganMEMBER

        That’s kinda how I work. I really don’t mind paying the price for good gear because I know I’ll have it for years. I’ll have to look into my inner self and realise I’m just dirty I’ve wasted three months being cheap when I could have had the job done.

        Hey! It’s like being a housing bear isn’t it?

      • I subconsciously do similar, I often add items to basket on a website, look at the costs and determine “Do I really need this now?” can it wait another month or 2? If the answer is yes. I put it out of mind and come back to it later. If I still really need want it, I’ll buy it.

        When it comes to cars I often test drive, then go home and think about it. Do I still really want this car or did I just want it in the moment? It’s amazing how much crap you don’t buy when you don’t give into impulse. That’s why banks all love paywave and tap and go etc.. if you hand over cash you actually think about what it takes to earn that money… If you buy online it’s easy to look at it as just digits on a computer screen.

        To answer MB’s question, I think people buy loads of crap at those sales “because discounts!”.. Sister in law loves sales, first thing she said about the house I bought was that I’m not far from “Eastland” shopping center and the missus looks at me and laughs and says, Gavin doesn’t care about shopping. I just hate the whole experience from getting to the shopping center to walking around like a zombie to forking over cash for crap.

        For some essentials sure, for things I need sure, but otherwise I really don’t enjoy it. The other day I drove past DFO in Essendon and saw a massive queue of cars along the freeway waiting to get into the place. I just thought, who could be bothered? But apparently a lot of punters are bothered enough to waste their holidays doing it.

        • Same here, that’s my Amazon shopping basket.

          And the bloody queue at Essendon Fields DFO turn-off pisses me off as I want to go over the overpass to Moonee Ponds.
          Since the bloody lane change being cut off at the old Bell St. On-ramp I’ve ended up on CityLink 2x now rather than fight through the traffic maddness.

          I still don’t get DFO, the brands are all the low-end ‘fashion brands’ at high-end prices.

    • I bought up on internet Friday, i agree boxing day etc was all rubbish and I too wonder what all the fuss is about

  7. AUSTRALIA …

    The Shocking Size of the Australian Wildfires … Katherine Buchholz … Statista

    https://www.statista.com/chart/20387/recent-wildfire-events-by-acreage-burned/

    The devastating California wildfires of 2018 and last year’s fires in the Amazon rainforest made international headlines and shocked the world, but in terms of size they are far smaller than the current bushfire crisis in Australia, where approximately 12 million acres have been burned to date. Fires in remote parts of northern Russia burned 6.7 million acres last year, but most of the regions were sparsely populated and no casualties were reported. … read more via hyperlink above …
    .
    … via …

    The Shocking Size Of The Australian Wildfires … Zerohedge

    https://www.zerohedge.com/health/shocking-size-australian-wildfires

    … concluding …

    … The bushfires grew more severe amidst a heatwave that saw Australia record its hottest day and simultaneously driest spring on record, according to The New York Times. New South Wales has been affected disproportionately, plunging Sydney into dark smoke in mid-December. Around 10 of the 12 million burned acres are located in the state.

    Bushfires frequently occur in Australia, with some years bringing more severe destruction that others. Scientists are claiming that in connection to climate change, fires will become more frequent and more severe when they happen.

    • I don’t know the data for area burned, but on every other human parameter (buildings destroyed, lives lost, injuries) this year is a non-event cf. Black Saturday 2009 in Victoria. Look up the data. This is a statistical blip by comparison.

      I’m not wanting to upset anyone or cause any grief. But I have a strong impulse to deflate hyperbole. This is nothing so far compared to Black Saturday

      • In terms of area Black Saturday was comparitively small, it was just in a number of really bad spots. That season started late Jan as well. Knowing that all of Jan and Feb are still to come makes this season pretty bad.

      • Ina loss of life scale it hasn’t been as bad as Black Saturday. On a destructive scale it is far larger. One of the reasons why these fires haven’t taken so many lives is all of the lessons learnt from Black Saturday, especially in Victoria.

      • Ronin8317MEMBER

        Black Saturday is only 450k hectare. We are at over 5 million hectrare now, so over 10 times the size, and it’s not over yet.

        Black Saturday was only Victoria. We now have bushfire burning in QLD, WA, SA, VIC, NSW, ACT, and maybe soon even in TAS. This is unprecedented, and the PM refuse to talk with people who predicted this due to political ideology. Feel free to bury your head in the sand, but as I type I am breathing through the second month of very bad air in Sydney, with another month to go. This is definitely not a statistical blip.

      • China PlateMEMBER

        Are the current fires done and dusted?
        Or are we comparing half time stats with full time stats of previous years

      • Arthur Schopenhauer

        After the 2009 disaster (138 deaths) the Victorian Gov changed its warnings from the ambiguous ‘decide to stay or go now’ to ‘leave now’. That change has saved a lot of lives this year.
        Along with the revised warinings, the phone App was developed and the lines of communication were streamlined.
        Also, a large number of older electricity wires have been upgraded to fire resistant wiring. This is still being rolled out across the state, including suburbs adjoining the Yarra in Melbourne.
        In terms of area, these are the largest fires since European settlement of Victoria.

    • This is a warning after the tripartite exercises in the gulf with CRI, China Russia and Iran. It’s opportunistic and tactical. It’s very Trump and there will be more to come.

      Welcome to the 20’s… alike the 1920’s but with out the Jazz and German whiskey bars, sadly.

      Risk on, full bore.

      No deal with PRC next week.

      • Interesting, I was gonna ask why the US made the strike and what they are trying to do, seems none of the news content I’ve read so far has explained why..

  8. TailorTrashMEMBER

    Used to think Scomo reminded me of Himmler ….( that threatening persona when he was stopping the boats ) ………well I’ve changed my mind after imagining a peek behind the walls at Kirribilli house in the last few days in this summer of our discontent …

    https://youtu.be/jmWtynh2Xwc

    • He is a nothing man. A perfect example of executive leadership in 2019-20 Australia. Do nothing, problem solve nothing, benefit nobody, fixate on the message and optics. owes his leadership to the Murdoch political party, whose well thought out policy positions have been implemented. If journalism wants to be a political party, then their policies should be held to account the same way as Rudd and pink batts.

      • Sadly, I’m unsurprised. Also, the words like “Crisis, catastrophic and Primeminister” have lost there effect on me. Hollow.

        It’s truly disgusting that none of the PM’s media mangers and lackies brought no water nor food to SHARE.

        I read the Ross Gittin’s article posted by Gunner, which the core of it points out that the Government would rather defend their surplus than spend on supporting Australians and the RFS.

        Think about that, we know politicians are as deep as a piss on a plate.

        But this, by Mr Gittins is so on point, let’s not buy them any food or water their volunteers and we’ll shift that cost to the Australian public with their direct donations, nothing from the government.

        Disgusting.

        This is Howardism matured into what can only be the myopic swamp of self interest.

        Their all children of the era.

        Let them eat ashes, we’re fine in our Ivory Towers in Maui.