Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Fear is starting to spread among the bubblish risk markets across Asia with the Chinese virus contagion sending stocks sharply lower ahead of the Lunar New Year holiday.

Chinese stocks are leading the selloffs, with the Shanghai Composite falling nearly 3% this afternoon, currently below the long held 3000 point barrier, while the Hang Seng Index has fallen almost equally as sharply, down nearly 2% at 27812 points. This puts it back below trailing support and ready to breakdown further as all confidence is wiped out:

Japanese share markets didn’t escape the carnage as safe haven buying in Yen accelerated. The Nikkei 225 closed nearly 1% to 23810 points, wiping out the previous gains and getting back below the key 24000 point resistance level. The USDJPY pair has broken through its critical daily and weekly support line and is now sharply below the 110 handle:

The ASX200 was the relative best, absorbing both the risk off mood and a higher Aussie dollar, losing only 0.6% to 7087 points. The Australian dollar lifted on the unemployment print with expectations of a rate cut pushed further than next month’s meeting, but there’s not much to get excited about here just yet:

Both S&P and Eurostoxx futures are pulling back, but not as much as expected, with the four hourly chart of the S&P500 showing a minor retracement back to the start of week position after the market failed to return to the ridiculous uptrend line above:

The economic calendar will be all about the ECB meeting later tonight, but also watch out for the DOE oil inventory report and the ongoing Kangaroo Trial in the Senate.

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Comments

  1. Ronin8317MEMBER

    Just read an interview with Guan Yi, a HK professor who specialize in virus infection that recently went to Wuhan, and is currently in self-imposed isolation. His prediction is the Wuhan virus will be 10 times worse than SARS.

    http://www.caixin.com/2020-01-23/101507670.html

    Wuhan were not affect too much by SARS 17 years ago, so everyone were a bit slack in regard to prevention. It explains the decision to quarantine the entire city as Beijing have no faith in the Wuhan local government being able to handle the situation.

    Buy your face mask now, there will be a global shortage soon.

    • at its peak SARS was recording 100 cases per day. At this stage coronavirus is beating SARS as today is on track to record 200 cases in 1 day. Death rates stay same since this morning which is bit suspicious though.
      SARS infected about 10k around the world.

      • Time to get of this rock yet too much money wasted on fickle feelings, trinkets and zombie banks.

      • currently total number of infected stands at 616 and deaths still at 17 for very long time. Hope deaths number is genuine and Chinese are not trying to fake it.
        People reporting on the ground say there are thousands infected but who to trust..

        • Yeah but it could be people with weak immune systems represent a high proportion of the deaths. Not enough data to really know what is going on

          • Hay nothing like a quasi religious ex ante to get the unwashed cognitive panties in a twist hay mate …

            PS …. red = commie purifier ….

          • lmmaso gav … peachy thinks its clever because in the tide that lifted all boats they might have made dosh, not having a tanty about things not conforming to the laws of economic gravity as prophesied is representative of logic or cognitive stuff …. its more about bitching about stuff not conforming to their idelogical world view E.g. bad batch of test subjects they can rent off …

    • If someone has the virus and turns up to the hospital in China and due to overcrowding and staff shortages is told to go home and self quarantine then that doesn’t count as a confirmed case. Problem solvered.

    • Well do the face masks actually work? Is it spread by breathing in stuff that can’t get through a crap medical mask?

      And will my deluxe P2 anti bushfire smoke bad boys stop this corona thing fcken?

    • I lost interest when they started talking about higher density living as the solution. It is always about population ponzi and GDP.

      • Be more like Switzerland or Austria i say.. renting isn’t so bad. I wouldn’t mind renting if it wasn’t for dealing with agents and landlords and I could make it feel more like my own place. But it just sucks renting in this country.

    • The important thing is if it makes the price of gold go up … so post rapture the virtuous can be identified.

      • Arthur Schopenhauer

        It rained mud in Melbourne this morning. Is there a reference to muddy rain in the Bible, or is God really starting to lose it?
        Fvck’n rapture…

    • That’s what farmers are going back to 1980s John Deere tractors. And why vintage cars are going up in value. Nobody wants an iPhone experience when it comes to their cars..

    • Possibly. Think LvO posted a blog about it earlier this week.

      Figure it was a result of the election and the realisation that franking credit refunds for non-income earners were safe, and that given the spanking delivered to the opposition they would never be silly enough to threaten to take them away. Would like to see if there was a particular demographic that used that strategy. Could well be a one off boost.

      • ABC can’t get this right.. “However, it appears to highlight how desperate some Australians have become to obtain that dream, or just to simply get ahead.” – when in fact should be:
        However, it appears to highlight how desperate some Australians have become to obtain that dream, or just to simply get a head.

          • And that is applicable in the last …. I don’t know … 50 years but yeah … margin lending …

            Hay mate I showed china bob back in the day how lenders had completely gamed IR E.g. they had completely made irrelevant IR rates and how that dictated lending risk, not to mention VaR, derivatives, VIS, and a whole pantheon of other M-M shenanigans by the so called CAPTIALISTS …. so are you suffering some psychological malady that inhibits your perspective of time and space – ????

        • Here is what I’ve learnt. Savers get the strap on treatment. Asset owners get to sit on their hands and nobody goes to jail. The poor get poorer and all legislation to prevent it gets rolled back because profits! Reusa gets more handsome and your wages stay the same while the basic costs of living go up. Have I missed anything yet?

          • Ummm …. you must have believed in the whole saving meme being something about individuals and not a trope about how a county should be run or vindicate the – at the time – respective about Corporations as being the height of human organization …

            Your catching up with footsore …

    • Of course not. Who’s going to stop them? Talking at work today with two rusted on Liberals and even they are disillusioned with the state of the nation. Said “Why does everyone hack on the French for being pu$$ies? Increase tax and they’ll riot, don’t like something the Government does; invade central Paris and torch the joint. What do we do about holding our government to account? Nothing. We just look on and passively accept government corruption.” Once the stunned looks subsided and the rationale kick in, “yep, you’re right. We just accept it.”.

    • Buy more gold because the end is nigh and I cant live the life unless my unproductive horde increases in price, whilst I sit on my ass and day trade cause its the height of capitalism … not to be confused with Pachinko risk factors …

      • Seriously Skippy, what is your problem? are you retarded or something? I don’t mean to be rude but I am genuinely interested in what your mental illness is called.

        • Do you consider that an argument or just your on personal smoko like opinion, its special to you but does not represent reality.

        • The best part about the name skippy, is that while scrolling down the comments as soon as you read the name skip.. you know you can skip past the comment without reading it. At least that was thoughtful of him and contained some introspection.

          • Aaah another grumbling gas without disticto … some consider it a logical argument … what happened with your camps special powers – ????

        • Skippy a standard Keynesian that laughs at the fact that productive workers have a need to use currency as a store of labour, and that those who are a little more sophisticated choose to park a small portion of that saving into gold as a form of insurance.

          Too mathematically inept to realise that it is actually CBs and currency debasement that has caused a major shift into unproductive assets. Cheer on MMT to destroy savers and reward those highly levered in unproductive assets…Cognitive Dissonance thingy

          • A. I’m not a standard Keynesian [what ever that means], I’m a post Keynesian and have made that clear numerous times – so categorical error compounded.

            B. Per above I don’t follow the belief [tm] that currency is a store of anything, too much a time and space problem, what I do acknowledge is currency is an accounting tool in facilitating trade. Otherwise tell me how your going to get that gold in a phone or internet cable to facilitate trade.

            C. never said people can’t own physical gold as part of their investment allocation, just point out it does not have special magic powers some like to imbue it with. Its just a commodity at the end of the day, trade accordingly.

            MMT does not force market participants to funnel money in to financial paper, that has more to do with the whole free market innovative memes w/ a side of deregulation, revolving door, and industry writing its own legislation – see mobs like ALEC et al ….

      • Scotty from marketing

        Shut your hole you jealous barch you don’t have what takes you even have children what looser

    • Did people not hear Frank Lowy ring the bell at the top on his way out? Watch what they do, not what they say.

    • Ronin8317MEMBER

      How do you rate an apartment that doesn’t even exists? Did the eating company know how to time travel?

    • We’ve always had viruses and only 97% of the experts believe we should be concerned. So this is obviously a conspiracy among doctors to get funding to continue their fake research into things that don’t exist. #falseflag #chemtrails #soros #illuminati

    • I got quite excited at the prospect of a moaning Melanie. At least I thought Reusa had something to do with it. But alas it’s just an old uncooth renter complaining. 😎

  2. NEW ZEALAND’S OUT OF CONTROL AND DESTRUCTIVE HOUSING MARKET …

    Kiwi homes pass $1.2 trillion in value, Core Logic says … Rob Stock … Stuff New Zealand

    https://www.stuff.co.nz/business/119005258/kiwi-homes-pass-12-trillion-in-value-core-logic-says

    The combined value of New Zealand’s houses and apartments has topped $1.2 trillion.

    The average house value at the end of December was a record $710.129, said property research company Core Logic senior economist Kelvin Davidson.

    He expected further house price rises in 2020. … read more via hyperlink above …
    .
    .
    WHAT LESSONS ARE BEING LEARNED FROM GREATER CHRISTCHURCH ? …

    New survey ranks NZ’s most and least affordable cities … Anne Gibson … NZ Herald

    https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12301144

    Tired of the traffic hassles and back-to-work blues? Thought of moving to Christchurch to get a better life and lifestyle? That city turns out to be by far our most affordable when incomes are compared to house prices.

    Down south, the house prices are low but the incomes are high and out of eight areas just surveyed throughout New Zealand, Christchurch house-buyers have by far the best deal financially. … read more via hyperlink above …

    • I’m not convinced it’s necessarily that deadly. It might be. But most of the victims so far seem to have been elderly or otherwise immuno-compromised.

      But the thing with epidemics is they don’t need to be actually deadly to cause economic consequences. Fear and panic can do that all by themselves.

      So… Black swan…?

  3. Let’s see how long it takes for Morrison to fvck off somewhere on holidays the say it’s a state issue.

    “Health authorities brace for coronavirus’ spread from China”

    https://www.smh.com.au/politics/federal/health-authorities-brace-for-coronavirus-spread-from-china-20200123-p53u3h.html

    “Biosecurity officers met all passengers on the last flight out of the central Chinese city of Wuhan to arrive in Australia on Thursday. Australia’s chief medical officer, Brendan Murphy, warned it could be weeks before any infected passengers showed symptoms.” Great. What the fvck are you doing about people who’ve travelled through Wuhan or other infected areas but entered through other ports? Yeh, thought so.