Macro Afternoon

See the latest Australian dollar analysis here:

Macro Morning

Its a risk off mood here in Asia today with the fallout from the Apple revenue guidance striking a little bit of fear in stock markets. The release of the RBA minutes sent the Aussie dollar down, while gold and Yen advanced on the safe haven bid.

The Shanghai Composite is stumbling around after its long lunch break, barely holding on going into the close to be down 0.15% at 2978 points while the Hang Seng Index is down 1.4% to 27560 points taking back all of the previous weeks gains. As I’ve been stating, the recent uptrend required a break through firm resistance at the 28000 point level, as momentum was not yet positive:

Japanese share markets are now tripping over themselves as the risk off clarion rings, with the Nikkei 225 losing 1.5% to 23168 points, now wiping out half of its recent gains. The USDJPY pair is retracing too as Yen buying accelerates, pushed well below the 110 level and now threatening key support at the 109.70 level:

The ASX200 put in another scratch session, down 0.16% or so and barely getting out of the gates so far this week, stalled just above the 7100 barrier. The Australian dollar was pushed lower by the dovish RBA minutes, breaking through the 67 handle against USD, as the dominant downtrend continues:

Eurostoxx and S&P futures are down in the wake of the Apple guidance, with the four hourly chart of the S&P500 almost fulfilling the bearish rising wedge pattern that has been slowly forming since the last minor dip:

The economic calendar ramps up tonight with the latest German ZEW survey, UK labour data then a slew of US Treasury auctions.

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Comments

  1. Regarding the assumed racism against ‘asians’ because of Corona virus, I’m not sure why the medical fraternity is pushing it so hard. I’m getting a lot on work related socials. A lot.

    I also saw in one article on a medical professional page(local in Aus) about how diversity in medicine is important because of relatability by them to patients. What about the Legacy Aussies being treated by doctors, a position that has a far higher ratio of as!an and !ndian to caucasian staff?

    • They’re just getting us ready for the planes to start zooming again. If ppl start getting proper sick here as a result the racism will be through the roof. One thing I am certain is that this govt doesn’t give a flying f$#$#k about its citizens. When they do let flights back in, I am guessing Chinese will be absolutely flooding the RE market with any cent they could get out. Anyone else think this will be the case?

    • my old man is a retired specialist. he is in his 70s and does locums down in tassie where the regional hospital is desperate to get him back annually because the older locals there (predominantly caucasian) prefer to see a caucasian doctor (even an older one) over the fresh off the boat indians they can’t understand.

      • I’ve worked with overseas trained doctors and the ones from the subcontinent are generally OK (some are pretty good) but for the most part they’re pretty arrogant and most concerningly they lack insight into their practice. Insight is what results in things going bad.

        • Locus of ControlMEMBER

          Best doctor I ever had was Sri Lankan (spot on with a diagnosis which three other doctors had missed, then followed up to get me the treatment I needed – she was a saint). Worst doctor I ever had was Indian (misdiagnosed a fungal skin infection as a bacterial one – a pharmacist subsequently managed to give me a correct diagnosis!). You can’t pick a good one from ethnicity alone…

    • Ironic – just saw on the news about careflight NT intentionally hiring aboriginal staff because they want staff to represent the community I serve. Which one are we doing again?

    • Societies always become stupidest before they finally collapse. All this hand-wringing about racism instead of actually addressing the fvcking virus shows that we’ve become stupid enough.

      • I think your comment is worthy of a cigar. No doubt all true.

        A deep recession will fix the problem – reset everyone’s values.

        • But it has to be deep, long and hard… just how Reusa loves being rooted. The kind that causes interminable despair, and pushes banksters to work with power tools (nail guns especially)

  2. US 3 month / 10 year inverted again in futures trading……Mr Powell can’t take a trick, he will get the PPT on the job tonight…can’t have the 30 year with a 1 handle…..it is all about confidence nowadays

  3. Andrew Sabisky: No 10 adviser resigns over alleged race comments

    Mr Sabisky had been appointed earlier this year after the prime minister’s chief adviser Dominic Cummings called for “misfits and weirdos” to apply for jobs in Downing Street.

    Andrew Sabisky: No 10 adviser resigns over alleged race comments

    This IQ thingy seems like pettifoggery for more questionable views … funny that …

  4. Mining BoganMEMBER

    I have a question. What’s been happening with the pig disease? Haven’t heard a thing since the Wuhan Flu hit the table.

  5. the article this afternoon re Singapore Airlines cutting back on their scheduled flights is the only confirmation I need about how bad the economic consequences are going to be from the virus … and highlights the cupidity and corruption that permeates our political and business ‘elite’ …

  6. The Traveling Wilbur

    Virus MEMBER
    February 18, 2020 at 12:29 pm

    My take:

    “If I can see a signal of a black swan then it ain’t happening”

    I’d like to extend that excellent observation:

    Ever since Trumpo was elected Markets wouldn’t know a black swan was here if it jumped up onto their trading desks and defecated all over them at random while humming Warner Brothers cartoon background audio.

    • There was discussion about this on the latest Market Huddle podcast. Basically, CBs injecting money every time they see anything bad at all. Algo’s programmed to just keep on buying dips, etc.

      The guest made an analogy to the cockiness of Houdini who could withstand a punch to the stomach from anyone, and offer to let anyone punch him. That assertion ultimately proving fatal when a student sucker punched him.

      • And just like the Australian economy, he truly was sick. In Houdini’s case it was appendicitis. Result of a punch by a student at McGill University and he passed away on Halloween 1926.

        • The Traveling Wilbur

          And just like the Great Houdini Australia has made a whole bunch of things disappear, including:

          integrity
          ethics
          tax revenue
          morals
          a fair go
          political independence
          freedom of the press
          the best interests of its citizenry.

          • The Traveling Wilbur

            fckn. Manufacturing. fckn.

            And retail outlets.
            And floor-size city office leasing clients.
            And sandwich bars.
            And newsagents (ciggie shops).
            And greengrocers, butchers, bakers and candlestick-makers.

            I’m absolutely not mentioning DVDs. Just not.

    • The Traveling Wilbur

      Maybe Dick Smith could buy the brand back now?

      Serendipitously there are lots of nuts in every Holden. And some big ones behind the wheel too sometimes.

      • Buy the brand? maybe. He could also just wait out the trademark. if you don’t use it for ~ 3 years it can be set aside by the trademarks office.

    • That’s got to be a fake. Didn’t Frydenberg get his start working in Howard’s office? He was a staffer, surely there are plenty of photos of him with JWH.

  7. Snotty from Marketing’s looking pretty haggard. True to form, launches straight into talking points when asked about the ANU research that confirms a large slab of Aussie’s reckon you’re a cvnt. No empathy, no reaching out, it’s all about “we the Government”. Cvnt status confirmed.

    “Scott Morrison reacts to new poll showing loss of support after bushfires”

    https://www.news.com.au/finance/work/leaders/scott-morrison-reacts-to-new-poll-showing-loss-of-support-after-bushfires/news-story/a83624725d7c1a67c6533ee8ce2899b2

    • happy valleyMEMBER

      Except on quiet Strayans, AJ devotees, Sky News after Dark RWNJs and franking credit “refund” leaners, marketing spin has passed its use-by date.

  8. Gav,
    I’ve a follow up to your bothersome landlord post from last night.

    Today I me someone from NTCAT and asked them about landlord v tenant and their take on it. It was that they don’t seem to think one group is more nefarious than the other as they see the faults of both sides in equal eamounts. A lot of the time the issue with the landlord is due to the agent. And, from the LL’s perspective, the tenant seems worse than they have been due to the agent not passing things on and fixing things up so when they move out the LL thinks that the tenant is worse than they have been. So always keep the agent on their toes. (It’s nice and easy in Darwin because of how dead the market is.)

    A big error that a lot of people have when things go to the CAT body is they believe that it is there to represent them, not adjudicate on the matter at hand. Often they sympathise with the aggrieved party yet can’t rule in its favor. That may be because what they are bringing forwards isn’t an issue, or they are approaching the issue from the wrong angle. (This is most common for hardship related claims and rulings from what I could gather.)

    The basic advice was to just do what the paperwork says and let it take its course. And, should you ever rent again, or enter into any other contract, get on the front foot in the beginning. Let them know that you have a keen eye and won’t be apathetic towards things and they’ll either decide not to do business or realise that they have to meet their obligations.

    • Footsore,
      That is 100% correct.

      We have been a renters all our life and still are. 99% of the time it is the agents fault but guess what most landlords do not have the basic grasp of the rules and regulations.The most important being, the contract is between tenant and landlord, agent is nowhere in the picture. When things go to CAT with a renter armed with paperwork, it is most likely the case the landlord comes second best in the race.
      Most renters, for whatever reason, are under this self-enforced thinking “renting is shameful” hence try not to complain/chase up works/take things further. Well, on top that, of course they whinge about renting is horrible because LL/agent is not very good.
      Mind you, there are many landlords who are hopeless. But just like exploited-employee exploiting-employer, the exploitative nature exists because it is working for both the parties, one way or the other.

      Renting is a simple business contract like hiring a car, you pay money for services rendered. If you are not getting your moneys worth, you should take action. If you are not taking action then the belief is that you are getting your moneys worth.

    • Interesting, I’ve been reading materials on it, I think the items the landlord is picking at are well beyond petty. I’ve offered $60 towards additional clean up costs which I think are far more than reasonable. I’m willing to go all the way due to the LL’s behavior during the tenancy and happy to lose.. if req.

    • Read about Lambie’s diatribe against the declining trust in politicians and their lack of transparency. When an audience member questioned her support for repealing the Medivac laws, Lambie said “ah, that was different” and cited that old chestnut “national security”. Took a massive step down in my books.

      • I agree, but I’m also willing to give her the benefit of the doubt on it for now. May change my mind later.

    • I watched some of that. The new presenter is much better than the previous one. But the show is still kind of frustrating because they spend the whole time avoiding the elephants:
      Why don’t people trust politicians:
      1. Journalism. Not based on fact anymore which means politicians can lie easily.
      2. Because there are 2 neoliberal parties and neither party represents ordinary people. If Curtin or Menzies was in politics today people would trust them. Because Menzies did represent the middle class and Curtin did represent the working class. It’s the artifice of having two parties who still claim to be mass parties representing ordinary people who don’t. Shorten returned slightly to real labourism but then journalism got involved.

      When you have fraudulent parties who represent the wealthy and lobbyists and are able now to lie because of the media, then yes you will get untrustworthy marketing men in politics.

      • Yeah fair point, I tend to agree they avoid the real crux of the issue and there was light touching on the fact that many people employed to regulate an industry, end up with a job in said industry afterwards. Then there is the fact that people no longer trust experts because mainly of Economists who tell us all how good GDP will be, but our qualify of life goes backwards, basically we keep getting spoon fed information that is supposedly what’s good for us and “just trust us” and when we do we end up worse off for it. Again that’s Neoliberalism and the free market (for you and I) but the tax payer guarantee for vested interests.

      • Sweeper,

        “…. then yes you will get untrustworthy marketing men in politics….”

        At the risk of spoiling your thesis you end where you should have started.

        The reason we have untrustworthy marketing men in politics is because they win elections. Lying works despite claims that people want ‘truth’ in politics.

        If your political promises amount to a promise that the public will get something for less than it should cost AND people choose to overlook the lie implicit in that promise you will be elected and the voters are complicit in your lie.

        Now perhaps the public don’t understand the lie of running an economy on asset prices rising on private debt but do we really believe that?

        They know it is too good to be true.

        • I thought that was the “Free Market*” posse plan Pft, please go have a look at the Chicago schools Noble award dominance, not like you have supported its views in the past or anything.

          * you know spreading markets and democracy globally …

          I mean have you forgotten your gangs years of privatization, user pays, skin in the game, EMH, and government should be run like a business memes.

          But hay lets see how Sanders does, not that the institutional architecture and policy advocacy would endure. I could imagine your sort praying for a bust just to keep that from happening.

        • Just so were clear … neoliberalism was always a class based ideology and not about economics, Capital payed for some journalists [some call themselves economists] to write homies about how humans were supposed to act and except the outcomes of the market no matter what … its natural law [tm].

        • Just so there is no confusion … you know the part that comes before journalism …

          Basically, the classical model is a model for a corn economy: households decide whether to consume the corn or to save it. If it is saved it can be supplied to investors who sow the grains, repaying to the households one period later the credit amount plus interest.

          In the Keynesian model the ‘funds’ exchanged on the capital market are made up of money—‘funds’ are bank deposits. Funds are not created here by a renunciation of consumption but by the banks granting credit …

          In the classical model, there is a strict crowding out of private investors on the capital market by government deficits. The all-purpose good, which functions equally as ‘funds’ and as investment good, can only be used once.

          In the Keynesian model, on the other hand, ‘funds’ (money) and investment goods are independent of each other. Therefore there is no crowding out on the capital market, if deficits are financed by banks or the central bank. This is the fundamental insight of Modern Monetary Theory …

          Young students need to wake up and realise they are being taught models whose laws of motion are as inconsistent with reality as Ptolemy’s world view. We need a ‘Fridays for Keynesianism’ movement. – Peter Bofinger

          https://larspsyll.wordpress.com/2020/02/18/we-need-a-fridays-for-keynesianism-movement/

        • Skippy,

          As usual you did not address my point and instead rolled out your usual tropes and guff.

          Which is always ironic coming from an apologist for private banks.

    • Then I hope that they aren’t receiving any money from the local, state, or federal levels of government.

      • Not that old saw again. Parents pay taxes and school fees are co-funding as opposed to being fully funded by the state. My School website shows clearly govt pays roughly 10k per gov school student and roughly 2k per non govt student. Anyone would expect gratitude for putting in own funds and saving the government money for educating children, at least from an educated and civic minded person, but obviously not from you. Re St Kevins yes all over the news today, doesnt
        sound good at all from a distance.

        • The Traveling Wilbur

          Anyone would not expect to have to pay anything for the state provided education of their children in this country. Until they find out they have to.

          It is. But it isn’t right, sensible or a benefit to society.
          Expecting gratitude? Hardly. But some commonsense from those able to affect this situation would be nice. I.e. voters.

          What do we want?
          Higher education costs for kids.
          When do we want it?
          After our grandkids finish high school.
          How are we going to pay for it then?
          Higher house prices.
          Where are they going to work when they graduate?
          Work? Pah. They’ll have 1/16th of our property portfolio.

  9. NEW ZEALAND …

    School attendance down … Kiwiblog

    https://www.kiwiblog.co.nz/2020/02/school_attendance_down.html

    Interesting stats on school attendance and truancy.

    • Regular attendance rate down from 63% in 2017 to 57.7% in 2019
    • Unjustified absence rate up from 4% to 4.7%
    • Maori regular attendance rate down from 50% in 2017 to 43.8% in 2019
    • Pasifika regular attendance rate down from 51.7% in 2017 to 44.7% in 2019
    • Asian regular attendance rate down from 73.4% in 2017 to 68.9% in 2019

    The attendance rate has been falling since 2015 it seems. I would have thought it would be an educational priority to increase it as if people aren’t at school, then of course they aren’t learning.

    • Key word … allegedly. Australia has been removing non citizen criminals for a while now. We have to wait for the legal process to do its thing.

  10. Arthur Schopenhauer

    We’re starting to run out of steel. We used to be self sufficient in steel. Fvck’n steel.

  11. Is HSBC restructure an issue? I this like Northern Rock 2007? Just asking. Something seems to be seriously up at the moment?
    Just has a wiff of Northern Rock in a funny sort of way. Does anyone have any goss on HSBC.
    And just as an aside whats happened to my favorite bank Deutsche Bank? Are they solvent? How have they survived all these years? It is remarkable how completely [email protected]#d banks can survive. Who pays for this sh!t?