Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Its risk on across Asia as stock markets gather pace with big moves higher across the board, as undollar assets and safe havens are sold off. The bounce in oil prices is seeing commodity currencies like the Aussie dollar lift slightly, while gold is just holding to daily support as all risk goes into stocks as Wall Street looks to return to its pre-virus highs.

The Shanghai Composite has been bid all throughout the session to finish nearly 1.8% higher, closing at 2866 points while the Hang Seng Index had its best day, up 2.6% to 27477 points, fulfilling the previous bounces and almost getting back to its last support level:

Japanese share markets are catching up strongly as well with the Nikkei 225 closing 2.4% higher at 23873 points in a big surge that almost takes it back to its previous highs. The elevated USDJPY pair remains inflated and pushing higher, almost breaking through the 110 handle here in a very extended position that is supporting Asian risk assets as Yen sells off sharply:

The ASX200 was the laggard, but its not a bad result – 1% higher to 7049 points and confidently breaking through the 7000 points barrier finally. This is despite a slightly higher Australian dollar that is slowly melting higher following its post RBA bounce, now above previous trailing ATR resistance at the mid 67 level:

Eurostoxx and S&P futures are up over 0.6% and look set to return Wall Street to their previous highs with the four hourly chart of the S&P500 indicating a breakout above resistance at the 3340 point level after nominally breaking last week’s intrasession high:

The economic calendar includes another speech from ECB President Lagarde this time in Brussels, plus the latest initial jobless claims from the US.

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Comments

  1. Cannot see how this is anything but a blowoff top fuelled by escaping Chinese money – Hang Seng up by 2.6% even as the economy crashes around it! I really wanna short it but I have no idea how long that steamroller can keep going before it plunges into a sinkhole….could be a while yet

      • SnappedUpSavvyMEMBER

        The Chinese are about to bury more small, medium and large business debt then they are bodies, there is a reason the soil is so polluted in chyna, it’s full of bad debt

    • The Traveling Wilbur

      Peachy would say that your self-observed ignorance is saving you from an 4ss-kicking. 😨

        • The Traveling Wilbur

          Save us Oh Ber-knee Sandersbe, you’re our only hope. I.e. one may very well say God save Bernie, but if Bernie does get elected, then nothing will save the US markets.

          Apologies to you know who(s).

          Nothing. Not even a worldwide virus outbreak. Is apparently able to provide a buying opportunity. Nothing.

          • Since the market always goes up, you don’t need any buying opportunities. Buy now and await an even more ridiculous Black Swan event that won’t affect share prices whatsoever,

    • Before the virus crisis central banks were already printing $100bn a month and it’s pretty likely even more liquidity has been injected since in order to prop up stock markets. Everybody knows it’s a horrendous bubble and everybody knows they can’t afford for the bubble to implode.

      The thing is this: at some point investors are going to realize that liquidity injections are all that is keeping markets propped up and that this opens the door to a burst of inflation. Then we have a game changer on our hands.

  2. CORONAVIRUS … SOME ECONOMIC IMPACTS …

    Coronavirus spread will leave ‘a real weight on the economy’, warns Prime Minister … 9 News Australia

    https://www.9news.com.au/national/coronavirus-economic-impact-will-be-significant-warns-scott-morrison/93139e9a-5e82-4bc5-9389-49a0b4bf5526
    .
    .
    OPINION China’s coronavirus is not remotely under control and the world economy is in mounting peril … Ambrose Evans – Pritchard … UK Telegraph

    https://www.telegraph.co.uk/business/2020/02/05/chinas-coronavirus-not-remotely-control-world-economy-mounting2/

    The workshop of the world is closed. China is on a total-war footing. The Communist Party has evoked the ‘spirit of 1937’ and mobilized all the instruments of its totalitarian surveillance system to fight both the Coronavirus, and the truth. Make GDP forecasts if you dare.

    As of this week two-thirds of the Chinese economy remains shut. Over 80pc of its manufacturing industry is closed, rising to 90pc for exporters.

    The Chinese economy is 17pc of the world economy and deeply-integrated into international supply chains. It was just 4.5pc of world GDP during the SARS epidemic 2003, which some like to use as a reassuring template. You cannot shut down China for long these days without shutting down the world.

    Today’s investor euphoria at reports of two new wonder drugs from Zhejiang University show how badly unhinged the market has become. This is not the way that medical science advances. Nor could these anti-virals possibly be ready, in time and at scale, to avert serious economic upheaval. … read more via hyperlink above …

    • Just goes to show how close to the line people live in these mega cities. Imagine we had real supply disruption and how quickly civility would crumble. Yet our tards in parliament want us to become just like that.

      • Vangelis: Memories of the Green (Blade Runner Soundtrack)
        SmoCorona: Memories of the Brown (Engadine Runner Soundtrack)

        • The Traveling Wilbur

          Endagaine Runner. LOLd.
          Brilliant.

          The return of the Maccas counter staff toilet cleaner – Avenger Endagaine, also has a ring to it.

    • And on a serious note: toilet paper is the one thing you really want to ‘load’ up on when crisis strikes. If it runs out in the shops it becomes valuable as currency!

      • TailorTrashMEMBER

        I remember many many years ago when the public toilets at some of Sydney’s most famous beaches had half a phone book with a hole drilled hanging on a piece of wire . Can’t do that with an I phone .

      • With the notable difference that one gets cuts around one’s doughnut 🍩 if one uses currency (and plastic one at that) to wipe it

  3. Interesting perspective from the land democracy, freedom, and liberty – quote:

    In particular, her group’s sprawling and opaque structure has frustrated fellow Democrats, with some arguing that ACRONYM’s “company-within-a-company” collection of progressive news sites, consulting services and experimental merchandise vendors lacks transparency regarding its payments to consultants and staff, obscuring potential conflicts of interest or governance issues.

    They point to the mix of for-profit entities under the nonprofit parent company as especially problematic.

    “People are really frustrated and skeptical about the structure that Tara has created,” said one Democratic operative, who did not want to be quoted for risk of alienation. “There’s a nonprofit and then there are for-profits below it, like a nesting doll. It’s moving money around in a way that’s unclear to people.”

    and

    McGowan launched ACRONYM after Trump’s election as a “digital-first political organization” with the goal of electing progressive Democrats, mostly in state legislative races. The group quickly attracted attention, especially in Silicon Valley, from newly galvanized major donors including LinkedIn’s Hoffman, who was wading into politics and looking for projects to disrupt the Democratic status quo. (Hoffman and other donors in his network “took a chance” on ACRONYM, McGowan told POLITICO in 2019.)

    https://www.politico.com/news/2020/02/05/angry-democrats-unload-operative-over-iowa-caucus-results-110807

      • All of this began to change in the early 1970s. Determined to fight rising wages and stricter labor and environmental standards, which would bring higher costs, CEOs of companies like General Electric and General Motors banded together to expand their power on Capitol Hill. At first, their activities were mostly defensive: The goal was to stop legislation that might harm their interests. But as the political influence of big corporations grew, and their profits soared, a new class of professional lobbyists managed to convince the nation’s CEOs that, in the words of Lee Drutman, the author of the 2015 book The Business of America Is Lobbying, their activity “was not just about keeping the government far away—it could also be about drawing government close.”

        Today, corporations wield immense power in Washington: “For every dollar spent on lobbying by labor unions and public-interest groups,” Drutman shows, “large corporations and their associations now spend $34. Of the 100 organizations that spend the most on lobbying, 95 consistently represent business.” (Read about a principal architect of the lobbying industry—Paul Manafort—in our March 2018 cover story.)

        https://www.theatlantic.com/magazine/archive/2018/03/america-is-not-a-democracy/550931/

        But then many consider the 2000 election to be the final bell.

          • When all you have left is a one size fits all slur, finding hard to articulate these days eh chaps …

            I mean its not like your previous records are on display or anything.

        • ‘Drag’ queens are all the rage up here in QLD. The gubbermint is paying them to do public ‘story time’ for children.

          True story. You can’t make that sh*t up.

          • smithy, you’re extraordinarily naïve for someone of adult age (assuming you are). Do you think that Brisbane City council set out to employ these drag artists specifically or was it pure coincidence they applied for the job?

            As you know, I believe strongly in personal freedom and certainly I support the rights of all parents to voluntarily submit their young children to a reading session with drag queens, should they see fit. However, this was paid for with taxpayer money. Was the taxpayer consulted? Would they have given their collective assent for this brazen exercise in cultural Marxism? I think you know the answer.

            If having their children read to by drag queens is so important to the modern ‘progressive’ parent it really wouldn’t have taken much enterprise on their behalf to arrange it privately (and at their own expense). That way, the people who want something (fundamentally non-essential) can arrange and pay for it themselves rather than have the rest of the tax/rates payer community fund something they want nothing to do with. This is little more than the extreme Left element within public service conducting more social engineering i.e. this is the modus operandi of both fascist and socialist regimes.

          • Clothes it is then.

            They were specifically hired as part of “Pride Month”.

            Your reaction demonstrates handily why, unfortunately, it’s still necessary.

          • It’s irrelevant what they were hired for – it’s still a social engineering exercise.

            I have nothing against drag queens, regular queens, transgender folk, however, in a free society I have every right not to have someone else’s utopian views and social expectations shoved down my throat. Of course, the overtly globalist ‘progressives’ hate individual thinking as it interferes with their objective of ‘improving the world by force’.

            Progressives are bit like Nazis, only draped in virtue, so ya know — makes them good people.

            Much like:
            discrimination – bad!
            positive discrimination – good!

            Lol.

          • It’s irrelevant what they were hired for – it’s still a social engineering exercise.

            So were emancipation and suffrage. What’s your point ?

            I have nothing against drag queens, regular queens, transgender folk, however, in a free society I have every right not to have someone else’s utopian views and social expectations shoved down my throat.

            Indeed you do. By not going to a library where kids are being read to by drag queens, or any other type of person you might not like.

            Of course, the overtly globalist ‘progressives’ hate individual thinking as it interferes with their objective of ‘improving the world by force’.

            You can think whatever you want. The problem comes when you want to stop people from doing something for no reason except prejudice – like, say, reading to kids dressed in drag.

            The world is extremely rarely improved without force of some kind (thankfully these days mostly the indirect kind through laws). You don’t have the ability to own property today (something you can thank “progressives” for) because the people who used to own all the property gave it away with a smile. Your wife doesn’t get to walk into a voting booth because that right was conferred willingly. Etc.

  4. Arthur Schopenhauer

    Got a hunch. If the current carona trajectory limits Chinese industrial capacity, I reckon German toolmakers (eg Bosch) will do ok as countries/companies scramble to re-localize basic manufacturing.

    Maybe just wishful thinking.

    Go long 🧻

    • Trade war/tarrif kerfuffle now coronavibrance disruption is sure to make execs rethink thier manufacturing supply chains. Already impacting some automotive manufacturers. Topic was mentioned in a recent macrovoices podcast with Pippa Malmgren.

      • Arthur Schopenhauer

        Will listen to it.

        Have heard nothing but dismissal from the man-children who are in charge of our major companies.

        That said, there is a fair bit of lag in retailers and miners.

    • *scottish accent* Aw, give the man a break,… ‘e wanted the young lad to train for a caber tossin’ competition … and ‘e did’t ‘ave a caber?

  5. I was worried that by now this virus would have started to fly here in Aus among the locals considering the Chinese have been coming in left right and centre through Dec/Jan but interestingly it hasn’t and I pray that it doesn’t. In mid Jan me and a friend caught a pretty bad cold/upper respiratory cough from another friend that was also sick after coming back from Taiwan. At work there are so many staff and people I deal with coughing and with similar symptoms to what I had you’d think it was mid winter flu season. Maybe just maybe this virus is already spreading around but we are not copping it like the Chinese are? I still haven’t heard of a non chinese thats caught it, I know the 2 on the ship are “Australian” but they could be Chinese dual citizens, same as those Germans that caught it, are they proper German? There is massive lack of info and there is way more to this story than we are led to believe I think.

    • Agreed ive never seen so many people with a summer flu.

      I thought given the initial infection rate in Thailand it would’ve gone out of control there as they are not set up to deal with it. But it’s stayed in the initially infected who came from china

      • Fcuk me…my woman and I, both healthy active people….cycle, gym, bushwalking, no smoking, low booze, good diet etc….have been as sick as brown dogs for more than a week with a very debilitating cough, booger, croaking sneezing, weak and tired lurgi…..and it’s swept through my workplace too. I’ve never had a summer bug in my life. 🙁

      • Arthur Schopenhauer

        Interesting read. If the last option is correct, an experimental vaccine for SARS, the researchers on the related papers may have mysteriously disappeared, whereabouts unknown.
        If they are still about, I’d cross that option off the list.

    • They are obeying the law. 14 days in a country other than China and there is no restriction.

      • So no problem changing the original point of departure to Hong Kong instead of China to skirt the ban?
        Should just say accurate point of departure optional on the forms to clear up any confusion.

  6. blindjusticeMEMBER

       https://7news.com.au/travel/coronavirus/coronavirus-fears-as-oran-park-public-school-student-returns-to-class-early-after-china-trip-c-684548  who trusts self isolation, who thinks the parents self isolate??

  7. Had a cab ride with a Bangladeshi bloke today Chatswood to airport . Both adamant the borders need to be locked down stat. All of them. Also both don’t believe any of the stats .

    • reusachtigeMEMBER

      LOLOLOLOL. That Sanders fogue looks re-animated. Aint got much life force left for sure.

      • “Acronym group that sabotaged Iowa caucus birthed by billionaire who funded Alabama disinformation campaign” [The Grayzone]. “Silicon Valley billionaire Reid Hoffman funded the creation of ACRONYM, the group that sabotaged the Iowa caucus results, after bankrolling voter manipulation campaigns including the notorious online “false flag operation” in Alabama’s 2017 senate race.”

        https://thegrayzone.com/2020/02/06/acronym-iowa-caucus-billionaire-alabama-disinformation/

        Yeah it seems its still enough to fend off the likes of above and considering Rayguns last years or a third level dry drunk like Bush Jr – an upgrade.

      • “DNC Offers Startup $500 Million To Develop Pencil That Can Accurately Record Election Results” [The Onion]. “”As of this morning, we have commissioned the design and manufacture of a cutting-edge tabulation device that will be able to legibly report vote totals on a sheet of paper 99% of the time,” said DNC chair Tom Perez, holding up a rough prototype of the 7.5-inch hexagonal marking implement, which will be built and rigorously stress-tested by a new Silicon Valley business venture known as Sharpen.”

        Where is Stephen and his zero human agency direct democracy app – ?????? – seems a high cost [tm] option with worrisome fail [tm] rates when compared to the old tech put your mark on a piece of paper device. Seems some over think things for some silly reason …….