Macro Afternoon

See the latest Australian dollar analysis here:

Macro Morning

A spike in new cases of coronavirus shook markets up a bit here in Asia today depsite the good run on Wall Street overnight. Gold and other safe havens have lifted, with Bitcoin accelerating after its recent breach above the $10K mark.

The Shanghai Composite is down the most, off by 0.6% after the long lunch break, still above the 2900 point barrier but only just at the 2910 point level. Meanwhile the Hang Seng Index has only tripped up a little, down 0.25% or so to 27752 points. Price had recently broken out above the high moving average on the daily chart but the 28000 point level is where firm resistance lies, as momentum is still not yet positive:

Japanese share markets had modest falls with the Nikkei 225 losing 0.3% to 23787 points, as safe haven buying in Yen hindered the recent uptrend. The USDJPY pair fell back below the 110 level after breaking through quietly overnight with the next level to watch at the 109.70 support area that has held all week:

The ASX200 was the odd one out, actually gaining a handful of points, up 0.2% to 7103, breaking the 7100 level for the first time. The Australian dollar moved much lower, unable to sustain itself above the 67.40 level against USD, now deflating into the 67 handle proper and fulfilling the downward trend channel:

Eurostoxx and S&P futures are down slightly but not enough to arrest the growing trend on Wall Street which continues to make record highs. The four hourly chart of the S&P500 shows price still bunching up at the 3370 point level, getting ready for another breakout but trailing support is relatively close:

The economic calendar includes the final German CPI print for January, then the actual US CPI print and initial jobless claims.

Note: apologies for the lack of a Macro Morning post, but I was cleaning up my office that got flooded from the torrential rain the Sunshine Coast experienced last night! Hopefully the rain stays away…

Latest posts by Chris Becker (see all)

Comments

      • How good is it when a student from Turkey who admits he’s studying in Australia because it allows him to steal an Australian’s job in order to pay back the debt on the degree ….therefore it’s not an export dollar at all. It’s just a foreigner using our infrastructure for free whilst he gets his degree and contributes nothing.

        https://thepienews.com/pie-chat/ahmed-ademoglu-president-cisa-australia/

        And while he’s here he tries to shame Australia into jeopardising the health of our population in order to accomodate more exploitive cvnts like himself. Australia really needs to put these people in a leaky boat and push them offshore.

        “The PIE: And was part of your decision influenced by the post-study work rights?
        AA: Definitely. Because it’s a big investment. When we take the average, you’re paying around $100,000-130,000 for your tertiary education. And you do want to see some return of investment and there’s a variety of economic situations.
        Some students are coming with higher socioeconomic levels, so they might be okay to just finish up and go back home. But a lot of the people that I’ve met, they do want to get that return on investment. Because of the currency exchange, the money you earn in Australia is much higher than back home. That is very important because if you work back home, that investment, you probably gonna make that money in maybe 10 years. But here you can make that in like, two or three years.“

        • “That is very important because if you work back home, that investment, you probably gonna make that money in maybe 10 years. But here you can make that in like, two or three years.“

          Whomp, there it is.

          They’re coming to access our labour market and gain residency. It has little to do with actual education.

          • See comment to TTW below for a more basic unpacking …

            Hay its not unlike you and yours made packet in the past on the same effects you now wobble on about.

        • How is he stealing a job? I don’t agree with the immigration rate and would like to see it lowered yet if the dude is allowed to work here because of messed up rules then it’s not their fault. Don’t hate the player, hate the game.

          • Dylan …

            Your voting for two management brands for the same orthodox economic paradigm, understanding the latter will inform on the aforementioned.

          • I got offered a job taking people on guided surf tours here in Bali a couple of weeks ago. I refused because I knew I’d be taking a job that a Balinese fella needs. It’s their country, they deserve to get any available opportunities.

            What’s the difference ? I knew it was wrong and so does our exploitative mate from Hungary. Fvck the “ players “.

        • blacktwin997MEMBER

          ‘And while he’s here he tries to shame Australia into jeopardising the health of our population in order to accomodate more exploitive cvnts like himself.’

          i’d like to add

          ‘And while he’s here he tries to shame Australia into jeopardising the health of our population in order to accomodate more exploitive entitled Turkish hipster cvnts like himself.’

      • Yep. Can you imagine going to live in Turkey (or any other foreign land) and complaining to the authorities that the locals weren’t treating you quite as you’d like (or expect)? Apart from leading to bemused looks all round you’d put money on the local dignitaries giving you directions to the nearest airport, and wishing you well on your life elsewhere.

        Every single one of these pr1cks who have complained have zero self awareness. They came voluntarily – we did not enslave them (or maybe Domino’s did), and they are free to leave if things in this country are not to their liking. This would be obvious to anyone with an IQ over 75. No country has an obligation to give an armchair ride to citizens of any other country. I welcome anyone who comes over and gives it a good crack, fits in and is an asset to the broad economic endeavour, but whingeing visitors? There’s the door: GAGF!

        • blacktwin997MEMBER

          Tell you what, this story has emboldened me to return to study simply so that i can join this CISA group run by this turd, then attend their gala dinner so that i can subsequently nut the cvnt.

    • blacktwin997MEMBER

      Huh, first photo i’ve seen of that talking prolapsed anus Phil Honeywood. Looks like he sorely needs to contract some WuFlu to sort him out.

      Also – 950 000 international students? Jesus.

  1. 5 hours ago

    Australia becoming the new Easter Island

    There’s a certain medieval feudal logic to the unfortunate cataclysmic direction Australia is going, similar to the logic of 18th and 19th-century European political elites who held fast to the status quo of peasant serfdom, for fear that any reform would result in their loss of wealth and power.

    McKenzie is just the tip of the iceberg and to believe the sports grants rort is an isolated example of the misuse of taxpayers’ funds is to be thoroughly duped.

    The next two generations of Australians have to pay $225 billion for just 12 long-range submarines

    https://independentaustralia.net/politics/politics-display/government-failure-has-led-to-australia-becoming-the-new-easter-island,13590

    • Mining BoganMEMBER

      Geez, that Erica Betz is a smart one.

      “Abetz: …Next issue I seek to clarify, you did find that no, ineligible project or application was funded?

      Brian Boyd:

      No Senator that’s not what we found…

      …So we get to around 43% of those which were awarded funding, by the time the funding agreement signed, were ineligible.”

      Erica had to know that. Did he expect the Auditor-General’s office to outright lie?

      • Go easy on the poor chap. He’s only been in office for 25 years. There are a lot of rules to learns and standard to follow. It can all get a bit overwhelming and confusing.

    • happy valleyMEMBER

      The LNP Government really needs to get rid of the ANAO, as it is an impediment to the strong, stable and efficient government that the LNP is so good at?

      • Well actually they are but stealthily. I’ve been told that the ANAO has had to cancel planned audits for lack of resources. Same plan of attack worked a treat with the ABS.

    • The only thing preventing the spread of this virus, and the many MANY deaths that would ensue in Australia and all over the world, is the travel ban and quarantine procedures currently in place. Which must be strengthened.

        • The Traveling Wilbur

          It’s a mystery box. But an across the board mystery box.

          They all follow each other anyway (percentage wise) more or less – but yeah, if I had to pick one, it would have been that. And it would have been fckn yesterday too. fckn inconsiderate Chinese.

          • Ok! Let’s see how it goes.

            PS only govt bonds? Like VGB or something? No high yield i hope…?

        • The Traveling Wilbur

          Nothing will be below ‘investment grade’. Govt issue and private company debt.

          A couple of % (min) for a couple of months (max).
          I’m not greedy.

          If it didn’t go down as well as up I’d do it all day every day every year.

          Well, that’s the plan.
          C’moooooooooon black swan that unexpectedly poleaxes stock market liquidity. Can’t imagine where we’d get the swan from. Or what we’d keep feeding it if we did.

          • Sounds good.

            The fact I might buy a house shortly is sort of vaguely unsettling but at least it gives me a very firm excuse to stay mostly in cash and avoid making dumb moves (not saying yours is dumb… I’m more thinking leveraged short ETFs … very tempting, but the market can remain irrational etc etc etc etc…)

  2. GunnamattaMEMBER

    OK guys, I posted the below on the property parasites post……

    But for your evening homework, discuss

    The issue isnt as one dimensional as this – although the one dimension (housing) is bad enough.

    The issue for younger Australians is Housing in conjunction with Superannuation/Pensions in conjunction with Debt (and the asset base supporting access to it – coupled with the effect it has on the prices of assets created in periods of lesser overall debt ) in conjunction with Jobs and Incomes (in an era of casualisation the demise of Australian jobs focused around fixed capital investment – mainly manufacturing – and the rise of ‘services’ jobs which are relocatable the moment wages become uncomfortable for capital owners in any particular location) in conjunction with the Population Ponzi/Immigration (where Australian living circumstances are attractive enough to foreigners to drive them to want to come here and either accept the debt, the working outcomes or to have ensured they have access to funding prior to arriving in Australia) in conjunction with the dismantling, under the guise of efficiency/outsourcing/industry self regulation, of previously existing regulatory regimes – affecting everything from education standards to social welfare access, to job seeking, to public sector activities, to compliance and inspections in conjunction with the financialisation of Australian education access, to provide an avenue for foreign nationals to gain access to Australian migration, in conjunction with the crowded infrastructure – particularly in the outer suburbs (where they are increasingly being shunted by paucity of employment providing opportunities to move away and affordable housing), in conjunction with the taxation System harvesting PAYE earners and gifting funds to those in a position to salt away income (Negative Gearing, CGT, Trusts, novated leases for starters) and encouraging whole industries to become financial parasite on the budget……

    and on and on and on

    Bring on the Revolution.

    • Mining BoganMEMBER

      Well yeah, but a couple of Labor members got together for dinner and they’re about to implode! Leadersh!t trumps corruption in this fine, corrupt land.

    • I have young children and am keen to see a total reset of ‘the system’ while I’m still on this mortal coil.

      The problem seems complex because there are so many distinct issues but, in fact, most of the issues you list actually have the one source: the debt-based money system. There is not enough space on this blog space to explain in detail but the monetary system is well worth studying as, once you understand how it all works, all the pieces fall into place.

      It should be said that certain issues are purely a function of Govt legislation / interference (mandatory Super, immigration etc) but the overall financialization of the economy, including its side effects (the housing bubble and inflation), is really down to the fact that unlimited amounts of money can be created at will by the commercial banking system, or (failing that) the central bank.

      Once you join the dots, you’ll see that fake money has basically corrupted politicians and corrupted society. For all the virtue signalling nonsense we are subjected to, we are a morally bankrupt society. I don’t think most have noticed (yet).

      • Ugh money is debt, its a state thingy, you might better be informed it you took the trouble to reconcile the orthodox economics which paved the way for everything you lament.

        • It is a State thing and it shouldn’t be. Bring back the gold standard – and remove the state’s ability to rob the poor and working classes. Shirley it’s obvious?

          • Wages and productivity has nothing to do with what your payed in, it proceeds the notional value its ascribed in and has little to do with translates to consumption or time and space.

            I would suggest a gander at my link to TTW.

          • Sorry Dominic but it seems you think money is a work around barter or something, not that it was to offset the taxation in perishable goods, think overheads and spoilage et al. Its not the form that matters, there is and never will be impermanence too it, because at the end of the day its a legal construct and the quality of contracts matter more than the artifice its denoted in.

        • German Reichsbank president Rudolf von Havenstein:- the things he didn’t see coming eventually filled entire libraries.

          On August 4, 1914, at the start of the war, the gold mark – or gold-backed Reichmark – became the unbacked paper mark. With gold out of the picture, the money supply could be expanded to meet the endless demands of war.
          To this end, von Havenstein took public debt from 5.2 billion marks in 1914 to 105.3 billion marks in 1918. Over this time, he increased the quantity of marks from 5.9 billion to 32.9 billion. German wholesale prices rose 115 percent.
          By the war’s end, Germany’s economy was in shambles. Industrial production in 1920 had slipped to just 61 percent of the level seen in 1913. With a weak economy, and under the crushing weight of debt, it was time for von Havenstein to really get to work.
          In truth, he didn’t have much of a choice. The limits of fiscal and monetary prudence had been crossed when the gold-mark was replaced with the paper-mark. Reversing course now would have brought an immediate economic collapse and societal discord. What happened next? Lol

          • Groan … post WWI war punitive war debt stripped Germany of its ability to pay it off due to the gold standard- self fulfilling prophecy. The resulting trade shock induced a internal debt hyperinflation cycle which was noted in its currency post facto. Rule of thumb is its always proceeded by a trade shock which screws with VoM, yet their are cases which are more complicated like Brazil back in the day, not that neoliberal IMF et al had anything to do with it – see Hudson etc …

          • Dominic, my great-great father was a factory worker in the tobacco industry in the Austro-Hungarian empire. He was looking after 13 kids. Five brought his wife from the first marriage. Six brought him from the first marriage. Two, they had together.
            I don’t know the reason, and if that was a common thing to have so many kids at that time, but that is how it was. BTW, they were Catholics and time is 1900-1914.
            His pay was in gold coins. I still have some of those in 5 grams and 10 grams coins. With roughly 3 acres of land and factory work, he managed to raise all those kids. Some of them died in the second world war, but still, around 300 people exist today thanks to him and his wife.
            I know what are you talking about.

        • Skip, you sound like a guy/gal/ (insert appr, gender pronoun here) as someone who’d like to be edu-ma-cated:

          “The authorities had financed the war by printing money. Now, they figured they could print their way out of the post-war depression… the decision seemed like the right one at the time. It prevented an immediate crisis – with mass unemployment and political upheaval.

          “Von Havenstein knew it would cause inflation, but he considered it the lesser of two evils. He also seemed to think that the inflation would be moderate – as it had been during the war – and that it would reduce the crushing weight of Germany’s war debt. One little step led to another. And five years later, when von Havenstein died, the central bank of Germany had printed some 500 quintillion marks. This hyperinflation of the money supply caused a hyper deflation in the value of the mark. One U.S. dollar was worth 4.2 trillion marks by December 1923. Yet for all the ‘money’ held by Germans, they were destitute. The economy had caved in. Violent mobs were out in the streets. A decade later, the Nazis rose to power, the Reichstag burned, and 60 million died in WWII. But who could have seen that coming?”

          • Groan … please inform yourself of at least the Spanish empire or the plunder of the new world by its ilk in the political machinations of the day. To think it all went down to one fleet of ships from the new world due to a hurricane is absurd. Per say from an Australian perspective a Gold standard would make you someone else beitch, politically weak due to bargain power and then used to extract resources from whilst the benefactors horde the shiny stuff.

            For those that have a CCP affliction all I can say is bend over red rover …

        • Oh, okay. So what you contend is that there is no problem printing money as long as it’s done under the ‘right’ conditions?

          Just to be clear here: I’ll have zero sympathy for those who didn’t take action before. Don’t come back here requesting handouts. If you don’t own ‘real ‘ assets when this sh*t goes down you’ll likely find yourself enjoying all the ‘joys’ of poverty. Oh well, just desserts and all that 😉

        • On the one hand I don’t think saving in Euros is a bad idea if you’re a Brit – just to diversify. On the other, the ECB has been printing money furiously for some time and will continue to do so until the currency expires. I would suggest the Swiss Franc but the SNB has been doing the same – I think their balance sheet is larger than the entire Swiss economy. Lunacy.

          Currency savings don’t pay any interest any more and neither does gold which makes gold the superior savings option by a long shot. I do so through owning mining stocks but whatever floats your boat.

    • The issue is one dimensional. What you are describing is the program of Keating disasterism.
      And I can run through every bolded point (excl. the immigration distraction one) and point to the neoliberal Keating disaster program which set it in motion if you like.
      – eg. banking deregulation, cave in on NG, privatisation of pension system/confiscation of wages, labour market deregulation/ Accord, higher education – Dawkins revolution, tax cut / “inoculate all future treasurers” / privatisation agenda starving public infrastructure etc. etc. etc.
      oh and the worst which allows all the others to continue… the change in media ownership “prince of print” rules in 87 giving Murdoch complete hegemony over what people think.

  3. Of those outside Hubei who have been diagnosed with the infection, the % who have died continues to slowly increase.
    Last week it was 0.16%
    2 days ago it was 0.38%
    Today it has increased to 0.47%

    Still low. But that figure is moving in the wrong direction, and I expect it will keep increasing.

    I am reminded of SARS where the initial fatality rate was said to be less than 4%, but was ultimately confirmed to be 3-4 times higher.

  4. The Traveling Wilbur

    Hey footsore, found out (by accident) what MAFS is yesterday.

    And nah, MB can be insular and self-obssessed with the-much-necessary-impending-karma-sorry-doom, but it’s not that bad. Not MAFS bad.

    Now please excuse me while I take a break in the real world for a while. Have to walk the cabbage, reconnoiter the ever increasing number of rub joints in the precinct and complain to my local member about how all the guards’ announcements on my rail line are being done by ex-Qantas staff with a carrot still firmly wedged between their so-eloquently expresive little cheeks. A very large carrot.

    And about how Federal ICAC Now! Unless sports pork produces a LOT of gold at the next Olympics. In which case, all good!

  5. Anyone think it is legit that no new Coronabeer cases have popped up in Aus for a week now? I call bs, I’ve noticed the mainstream media have shoved the news to the very back too

  6. considering how many planes we let land from Wuhan is ti really believable that number of infected people hasn’t changed for days now? not that I am complaining and really hope this is true but considering how this gov operates I would not be surprised if hospitals and media being banned from publishing numbers.

    • Word on the street on the Mornington Peninsula today wad that staff at Frankston hospital ED were filmed in hazmat suits today. I did a brief search for the video but came up with nada. Will search more tomorrow. Need to get a good nights sleep as it’s the best thing to boost the immune system. But Neil Ferguson a UK professor reckons the west is identifying only 25% of cases, China only 10%

  7. So, today the Chinese authorities announced that they changed the definition of who has the virus and as a result the numbers for today showed a massive spike from previous days. Anyone thought of going back and recalculating the results for previous days using this new definition. From memory, only about a quarter of deaths reported today met the old definition so does that mean that the total number of deaths using the new definition is about 4 times that reported using the old definition?

    On the bright side, that the authorities have started to use a definition that gives much higher numbers of people infected and people killed by the virus suggests to me that they think the worst might be over.

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