Macro Afternoon

See the latest Australian dollar analysis here:

Australian dollar steady as stocks take out 2007 high

Risk took a calm sigh here today in Asia as the relief rally widened, with stocks rallying hard alongside risk proxies like USDJPY. The PBOC daily Yuan fix saw a big drop in offshore trading, down to the 6.92 level and almost a yearly low while the latest Australian trade balance figures didn’t effect the Aussie dollar.

The Shanghai Composite zoomed higher, up nearly 0.8% to 3072 points, while the Hang Seng Index advanced even further, gaining some 1.2% to be at 28412 points after bouncing off daily support:

Japanese share markets continued their high volatility but it was all upside today as Yen sold off violently. The Nikkei 225 closed over 2% higher to 23712 points. The four hourly chart of the USDJPY pair shows a big leap off the former lows that has extended past the 109 handle, almost back to the post Xmas breakdown highs:

The ASX200 was the worst in the region, but its all relative, closing 0.8% higher to 6874 points.  The Australian dollar remains stuck in a holding pattern post the Iran attacks and is positioning for tomorrow nights NFP print hovering right on the 68.70 level against USD going into the City open:

Both S&P and Eurostoxx futures are suggesting a small lift higher tonight after the big relief rally previously with the S&P500 likely to build above its previous record high level once more:

The economic calendar includes a few mid tier European releases plus a speech by Governor Mark Carney in England, plus US initial jobless claims in the lead up to tomorrow nights NFP print.

Comments

  1. The stock market bubble keeps bubbling on..
    I sold out of Google stock in early January 2019 at around $1,110. Today it’s bubbled to $1,400.. That’s crazy growth in 12 months considering the state of the world economy.

    I believe Apple, Amazon etc.. have been similar.

    • Sigh the labour party needs to abandon neoliberalism aka orthodox economics, pinning all the blame on one sales man lets all the behind the scene actors and schools off the hook and then when they rise from the dead – again – everyone will act surprised?

      BTW good post over at NC:

      MMT advocates argue that the way out of this mess is to run the economy by setting a price for labor via a Jobs Guarantee, rather than manipulating interest rates. For those who have not yet read it, we strongly encourage you to spend some time on a seminal 1944 essay by Michal Kalecki on the obstacles to achieving full employment. It is the best single explanation of how we got where we are. – snip

      https://www.nakedcapitalism.com/2020/01/debt-has-not-been-caused-by-low-interest-rates-but-higher-rates-would-topple-the-whole-world-economy.html

      But yeah how many even know about the purge in U.S. academia of all but orthodox economics just before neoliberalism became dominate.

        • Don’t know what you read or your comprehension of it, although the linked article clearly states using a JG to set basic wage vs NAIRU and fiddling with IR = magic happens ….

          Before banging on about cog dis I suggest one do the appropriate research and leave the deductive [bias] methodology for Sunday school.

          I think the Bush Fires would be a good example of this policy or we can – ***hire*** – private sector looters and ticket clippers and then wonder where the value went for the buck … lol at shifted overseas by private sector and investors – clutches pearls arms wide pleading to the sky … you can’t make this stuff up …

          • I agree that shrinking the productivity pie by sending productive jobs overseas, and then expecting increased prosperity would be some kind of magic.

            Is that the same NAIRU that US economists could not explain to Congress why record low unemployment rates hadn’t resulted in wage inflation?

        • PS: Obviously you can’t. You will end up getting rid of many productive jobs, and destroy the currency to maintain an illusion of rising wages for the remaining unproductive jobs…. enter the Globalist MMT advocates.

          • LOL …

            I’ll just head you off at the pass with wage inflation, its a market position baked in for decades due to raygun and friends taking away bargaining power, go look at wages vs productivity since the 70s, supply and demand lmmao.

            If you refuse to read the literature that’s just self inflicted ignorance, don’t compound it by assuming stuff or trying to frame it in orthodox thinking – hint its a departure. Government would directly fund it, hence no globalist anything. Furthermore if your going to use hard currency optics your going to get everything wrong at onset and compound error.

            Is this the first time you have heard of Michal Kalecki, I mean its not like orthodox economics has been banging on about stuff with out a functional model of either monetary or financial systems for decades, you know how monetarism failed and quasi monetarism is hitting a brick wall.

            Really …. PK is trying to lower the cost of doing business, whilst providing a place for people to gain skills, human dignity, stabilize society by putting a floor under it, provide medical and educational needs [see aforementioned] so the private sector can concentrate on business – succeeded or fail and most importantly reduce the use of credit to offset wage stagnation.

            And then you wobble on about trashing the currency – ????? – look out the window …

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