Macro Afternoon

See the latest Australian dollar analysis here:

Macro Morning

A busy day in Asia with lots of economic reports confirming the impact the coronavirus is having on world economies, with the RBA all but ruling out negative interest rates as the local appetite for capital expenditure falls sharply. Despite the economic reality, the unrelated share market rally’s continue across the region, save for embattled Hong Kong with the gold price bouncing back alongside a slightly weaker USD.

In mainland China, the Shanghai Composite was looking at another small loss, but is up nearly 0.3% to 2844 points towards the close, while the Hang Seng Index is likely to finish with a scratch session, down 0.2% to 23254 points. This keeps it below previous firm support at the 23300 point level, but just above the long term trendline and a return to the March lows:

Japanese share markets continued their way too fast and too far rally, with the Nikkei 225 surging more than 2% higher to 21916 points, while the USDJPY pair was unable to burst through the 108 handle as it has been threatening too since last night to make a new weekly high, but its close:

The ASX200 had a solid session all day as bank stocks caught up with the rest of the stinking edifice, lifting more than 1,.3% to 5853 points. Meanwhile the Aussie dollar was effectively unchanged against the USD, just maintaining above the 66 handle and yet to rollover from its previously overbought position:

Eurostoxx futures are up 1% or so with S&P futures up half that as the four hourly chart shows the broader stock market now completely unhinged past the 3000 point level where its game on for all the unhedged long positions back to the pre-virus highs:

Latest posts by Chris Becker (see all)

Comments

    • reusachtigeMEMBER

      Fark I hate snitches! We really have become the snitching dog society.

      Snitch for wrong water use. Snitch for wrong distancing. Snitch for bong smoke. Snitch for teaching kids to ride a dirt bike in the local underused reserve. Snitch for profiting on baby formula. It’s farkn sickening.

      What happened to just punching someone in the head if you didn’t like what they were doing?

  1. RAMS slam savings accounts by 45 basis points. Because TINA?

    Gorging on the blood of savers to satisfy those in debt servitude.

    Enough. Going to close my account. In excess of 200k.

    Open to (sensible) ideas where the money could go.

      • Yep. Gott accounts with Ubank too, fair sum. Just waiting for them to stab me in the neck like Rams and will ditch them both.

        Enough is enough

        • Same – Ubank matures in July. Looking around – will forgo returns if they are from fringe players and those that could implode (I incl AMP in that).

    • Personally, the missus and I have accounts across all the majors and some of the minor banks. Hoping for return of capital rather than return on capital just now. If we could see anything that looks like an actually productive asset in this environment, we’d jump at it. As it stands, we’re unsecured creditors of seven separate groups of organised criminals…

      • Mentioned this recently

        Beef cows

        Fark the prices were off t1ts this week – backgrounders restockers trade , steers and heifers – some Sales ran lines above 500c/kg and 350 the norm

        Just crazy

        Get yourselves some land say wet country in northern rivers then go to town

        This is near us – cracking spot and next door to the local livestock transporter who’s a ripping bloke
        https://m.realestate.com.au/property-lifestyle-nsw-meerschaum-vale-700082442

        Or avos
        Or macas

        Shed loads of cheap cane acreage near us convert that to macas – mate has done that with 100s of acres

        • I’ve got 420 acres far south coast NSW. It’s nice in theory but dont forget that fences cost $10,000 per km and managing weeds (legal responsibility) can be a pain in the hole. If you are going to do it, buy cows, rent a bull and sell prodginey at 12 months. Can be quite profitable but they are only worth high $$ if they are healthy. Cattle eat a massive amount of grass and 100 acres doesn’t last long before the place will look like a dust bowl.

          Did quite well out of livestock for a few years before the drought and then the fires which torched all the bloody fences.

          • I’m on acreage myself – small lot Angus — all good points

            Weeds – who enforces weeds on south coast ? our neighbour has lantana and camphor out the wazoo plus fireweed and Paramatta grass – no one enforces this

            10k per km – not so much up here – but we havent had the fire south coast has (still lots but) – get tractor plus driver for larger acreage . Plus ACP posts – no timber – concrete = no worries with termites or fire

            Dust – that’s why I suggested wetter country eg northern rivers with appropriate lines eg indicus though Taurus lines do well here too obviously. Lots of Brahman , Santas etc but also Angus, charolais, Hereford etc etc. northern rivers accessible from Mel syd and bris pretty easily

            Spose it all depends on your parameters and horizon and tolerance . Cash and bugger all return at call with attendant perceived risk or land plus input costs plus return on whatever you’re doing .

          • I use aluminium wire electric for internal fencing. Single wire is enough for cattle, 1km of wire weighs 8kg, gal posts can be 8m apart on even ground, so the cost comes down to under $500 per km and the wife and I can do over 500m per day without knackering ourselves. One of the few modern innovations I actually like…

          • God wept, $10k per what? Just had some fencing replaced, over 5km , cost me $4k , lucky my boundary is shared by a bloke that is a fencing contractor I guess…
            Yep, as I said before in a post, don’t know whats up with livestock costs, but its giving me the heebie jeebies….somethings out of whack..
            Got my rototiller working overtime, churning up 3 acres to plant …The horses are getting fed, O/T, so as to produce a heap of the golden natural manure…oh, this may not go down well with that fellah that thinks gardening, and tafe/trades are watchcallit, chewing gum on his pointy shoes, but hey, me and the missus have done allright, the local kids , sparkies, diesel fitters, are able to buy some farms, but we are the chewing gum …hmmm…wont ever give that lad a roast if things go pear shaped..

        • Jumping jack flash

          Yes beef.

          I design and build machines for meat processing. Our machines are very good. Used all over the world.

          Im working on R&D projects to replace people with cheaper people, or with machines entirely. We call it augmenting skills. Everyone knows what it actually means but its what they all want.

          Plenty of government support and a lot of research effort.

          • I used to automate people out of jobs for a living too. That’s why I’m a farmer now. I think of it as a penance 🙂

        • Tell me about it… Not restocking here, as the prices are crazy (ditched all the steers when we started running low on water last year, then all the pigs just before Christmas) – so now we have 2 house cows on 56 Ha and I spend shedloads on diesel mowing pasture. Farming seemed like such a good idea at the time 😉

      • happy valleyMEMBER

        Ditto, my wife, our SMSF and my deposit accounts spread across seven separate groups of dubious businesses regulated by a “poodle” APRA and licensed and succoured by a happy clappy RBA.

    • Judo
      Xinja (caveat emptor)
      Bankwest telenet saver – open new one every 4 months
      Citibank saver see above

      • darklydrawlMEMBER

        I would be leary of Xinja. Do your homework before putting your coin with them.

        • Ya

          Tis why I caveat emptored

          Just went unconditional too. Got a rental today

    • happy valleyMEMBER

      Yep, goodbye RAMS for $100k – thanks for screwing me over all the way down from when they were giving a 3% all-up rate. Sick of being f.cked over for senior management (no responsibility) bonuses, shareholder franking credit “refund” leaners and recalcitrant borrowers stitched up by banks/brokers.

    • The Traveling Wilbur

      Ummm… clearly one of us hasn’t being paying attention? Buy an IP!

  2. – I am still not sure what the USD / Yen is going to do in the next financial crisis. Some say that this rate will go down as low as the high 50s or the low 60s. But the USD / Yen remained – more or less – flat in the year 2008. Odd, very odd ………….

    • I don’t know who’s saying that? 45 years of chart don’t show much of anything – particularly after late ’87. Lowest it’s been is around .75 Dec11 after a long grind down from ’08, But if you didn’t know history there’s no standout action. Flight to safety is usually from EM’s to DM’s by what I see. Or more precisely to JPY, USD & CHF in that order. With AUD, NZD & GBP hit hardest out of majors. With all the debauchery going on now, who knows this time around. FWIW.

      • – Precisely. Before I start to believe the USD /Yen will fall that deep I first would like to see this rate go below 100 and then 90. We’ll have to take one day at a time.

    • Sans crisis it’s worth testing whether supply currencies are better as Swing/R2M strategies. Likely even in crisis IMO.
      Maybe test trending on JPY & USD crosses. I’ve had good trend success in the past particularly with GBP/JPY, also AUD/JPY. Lesser with AUD/USD as it chops too much wood in between moves for mine……

      • – I simply stick to less “exotic” currency crosses. Going long USD and short NZD, AUD, EUR, and other currencies in a crisis is also a “no-brainer”. Although the EUR / USD has held up much better than anticipated this year, even in the sell-off earlier this year. But as mentioned above, the behaviour of the yen remains a mystery.
        – When I compare the ASX 200 and the AUD/USD this year then it’s clear what we can expect when the next crisis hit. As said before, a “no brainer”.

  3. Any takers on what happens next? Does the ASX blast through 6000 next week? It’s got a huge amount of life in it, swinging 1.5 – 3% each day at these levels.

    • China does things on a scale that the rest of us poor mortals can’t hope to comprehend.

      Enough to cower the population. Given the resolve shown so far of the people of HK, I’d imagine the number will not be negligible

      • Why would you ascribe your own personal ethnic platitudes to the Chinese anymore so than an inaccurate perspective about money past and present.

        • SnappedUpSavvyMEMBER

          Why would you make assumptions like that
          Have you ever even been to your so called nirvana, have you actually ever been to China?

          • Jumpy got no money can’t pay for membership, let alone visit glorious nation.

          • Young Daniel, saying that Skip isn’t a payed up member is poor showing on your behalf….
            Skip has been here prior to 2012…You , young lad need a slap up the side of your head, as my Father would say…

          • haroldusMEMBER

            @Jigga a few of us have been too, and we can stump up for a membership, recognising the value MB provides to the broader community (and to us as well).

          • Didn’t think I needed say – again – that I don’t do black and white reality.

      • Mining BoganMEMBER

        Tiananmen Square numbers? If the Hong Kong kiddies put up a fight that might be an underestimation.

        • Again finger pointing after the 14 city crack down on Occupy which included death is some heavy duty cog dis.

        • I’d rate a TS outcome as a low chance atm, though things could change depending on how circumstances develop. My gut tells me a slow python squeeze to getwhat they want. However I know that before I left in 17 many Mainlanders had zero patience for HKers and a lot of hostility to their perceived differences.

          I’m finding the situation with India quite interesting atm. It’s also interesting to see that they’ve decided to up tensions with India and not Japan, but really they have so many neighbours with a potential dispute they can dial up or down at need

          • Regardless of their ability to dial the tensions up or down, having disputes with all your neighbours doesn’t seem like a good long term strategy.

            It’s an interesting thing to contemplate. Who are China’s international friends? I realise “friends” is a slippery concept in terms of international relations, but think of Britain and Canada for example. What’s the equivalent for China? I’m not sure there is one. There are subjugated countries like Mongolia and clients like the Norks, but I don’t think there is a country in the world that doesn’t fundamentally hate and fear China. The place simply has no friends. What a terrible situation to be in, and what a condemnation of their government and how it deals with the world.

      • This time they’re trying to cower the whole planet with various levels of pork choppery. Way too many fronts for it to go smoothly for them surely. Globally, people must be wondering how this whole mess has been allowed to evolve. But HK front of cue & edging to violence will be instructive. I could hope Kochie et al, would make this top billing, but I’m not holding my breath.

      • haroldusMEMBER

        Yeah Poppy.

        Why would you ascribe your own personal ethnic platitudes to the Chinese anymore so than an inaccurate perspective about money past and present?

        • Mate I’m in this weird day 5 fasting mental situation so I’ll try to describe it to you. I lived as a single white female in China for 17 years (I mention the single but so you understand I wasn’t influenced by a household of fellow foreigners who may have stopped me from adapting to my environment). I worked for Chinese companies for about 12 of those 17 years and had Chinese bosses, including 3 years in a Chinese government organisation (no better way to understand modern Chinese culture). Towards the end (last 5 years) I was so comfortable and had adapted to living there so well it was sometimes hard to differentiate between Chinese and western culture, esp with regards to cultural values (once you stripped back the comforting lies both cultures tell themselves), this disappointed my students no end when I sometimes couldn’t answer those questions. Upon returning to oz I alsorealised how much Chinese culture and values and behaviors I had taken on. I’m quite happy to say while living there I was an egg (obviously I can’t be a banana because wrong skin color). I’m less of an egg now, but there’s still a lot of yellow in me and I never want to lose it. There is so much about Chinese culture and north east Asian values I like and appreciate and there is a lot that I don’t. I don’t have rose tinted glasses like many westerners living there do. Politics is something different, and the ugly reality of life is something only dumb people not interested in surviving ignore.

          • How many tokens have humans used over the course of our history, any significant difference in the human relationships its precedes[????].

  4. I know SpaceX and Tesla are different entities but does anyone else reckon Tesla might be a short term short in case the SpaceX rocket blows up?

    A bit of a dark bet, I admit.

    • Would do some brand damage to TSLA… however a successful launch would help TSLA’s brand.

    • darklydrawlMEMBER

      whilst space fight is tough and bad things can happen, Space X have an excellent track record of safe launches so an incident would seem unlikely.

    • Last year I heard something similar about Darwin. Many had walked away from their mortgage and the banks were holding the properties off the market to avoid too many for sale signs. They’re the types of things I’d like to see from the banks. Even if the rumours over exaggerate the problem, or are completely false, it would help in gauging the true state of affairs.

      • Jumping jack flash

        “banks were holding the properties off the market to avoid too many for sale signs.”

        Ah the old GFC trick. If they dont sell them, they dont get a value adjustment. LVR maintained.

      • Morty Mulgrew

        Yep Swampy its probs just a good/bad story…but the fires on, Im on the Wine and the Footy is on in 45 Mins 🤯😊 … I know of many people in Ireland/ UK who handed back keys on multiple properties..The bank said “you cant do that ” reply.. ” I just did..Dont want them anymore ” In the end if the day , when the games over..its over..the banks cant get blood from a stone or where there is none 🤷‍♂️ . Many hid money, went bankrupt for a few years , and were much better off for the experience…F the banks, they dont own your person, they own your debt…but if you aint got it, they cant get it 🤙 Now Footy…🥳

          • Morty Mulgrew

            NRL ..Ill take footy any way I can get it at the minute…Im a GAA man myself 🇮🇪🇮🇪

        • Yep, when you got nothing left to loose, it’s easier to walk away. I would if I was up to my eye balls in debt. I’d rather go back to the start than suffer for 20 years in debt.

    • Untersberg Mountain

      I would like nothing more than for this to be true, but it doesn’t take much digging to see that this guy is a total gold bug. In his interests to steer the punters with any free $$$ to invest away from property.

      Those “I was chatting with [X] who has [Y] connection to [Z]” anecdotes are interesting, but really need to be approached cautiously and taken as entertainment value only.

      • Morty Mulgrew

        I know his stories are Fluffy to say the least 😂…but its entertaining to watch him try his hardest to push his agenda…hell everyone is doing the same in this country at the minute…hence the sheep cant decide which sheppard to follow 🤷‍♂️👨‍🌾😂

    • truthisfashionable

      I love the delusion that people ‘don’t just hand back the keys here’. I mean, its like they are giving it away.

      When all your eggs are wrapped up in the property basket, your 4wd, boat, jetski, furniture, iphones, and whatever else are all on novated lease/afterpay/credit cards, why wouldn’t you just hand the keys back. Chances are most of the debt will be written off, or the (because he who panics first panics best) amount owing will be far more manageable to give you some semblance of life back.

      • Morty Mulgrew

        And if everyone is defaulting at the same time…banks cant ( and wont) chase them all…It is a bad look in the community…as Ive experienced banks evicting people in Ireland…didnt happen too often , as by the second or 3rd one there was a crowd of 2-300 people jostling the police , shown on the 6 o clock news…banks stopped evicting immediately!..Some people in Ireland lived in their houses for 6-7 years without paying a penny as the number was too large for the banks to get through! Example.. person with main residence and 2 IPs and personal holiday home…crash happened….sold 2 IPs quickly, as in RE industry , covered their ass, banks came looking for personal holiday home, took 6-7 years of bit payments, basically non payments, when this person gets a third party to offer 40k euro for this holiday home ( was worth 220k at a stage but had dropped to circa 100k by then..but no buyers)…bank accepts this offer..person gets to keep their holiday home mortgage free. Bank couldnt take main residence as had been split into wife/ childrens/ cousins names…bank give up after 10 years…🤷‍♂️

  5. With News Corpse blaming all and sundry for the loss of 1000 jobs, except the fact they have a sh1t product, wonder who will spill on the links between them and the Liberal Party? I hope they’ve got some nice email trails.

    • happy valleyMEMBER

      Any chance Akerman, Devine and Credlin got shown the door, or because they are rusted-on LNP/Rupert, they are a protected species?

      Together with the new newspaper national delivery service almost invariably giving me that rubbish paper The Sun-Herald rather than Rupe’s The Sunday Telegraph on Sundays, I am ready to cancel Rupe’s sub as I can no longer stomach the Akerman/Credlin bias every Sunday.

    • Didn’t Morrison give them $40m to support regional newspapers? Wouldn’t be surprised if most of that went to mastheads. In recent years it seems like a lot of Sky and News journos are going to plum gigs at the ABC which seems to be heading towards the equivalent of Goebel’s Das Reich newspaper.

    • SweeperMEMBER

      Hopefully somewhere in the book there is a clear response to Krugman’s questions.

      • Done and dusted … only those with orthodox stakes in the ground buttressed with pay packets and legacy fear …

        I remind you that Keynes was abhorred at the notion that his legacy would become any sort of orthodoxy.

  6. 54 comments in, and nothing for George Floyd. RIP. If any of you have seen the 5 min footage of his death, it’s worth a thought.

      • Nah mate, a mention of some nice little riots doesn’t do it justice. No mention of the man, bloke.

    • I dont’ like the way Police officers handle people in many circumstances. This I can’t understand, the guy didn’t appear to be resisting anything, just pleading to be able to breathe. It sickens me, if I’m honest.

    • Ukraine fnMEMBER

      I would love to see who is behind or has an interest in Paladin. Wasn’t their business address a shack on Kangaroo Island S.A. ??

  7. reusachtigeMEMBER

    How freaky is it that some random dude in a random non-event Queensland town who never got out dropped from china virus and they have no fkn idea how he got it. 5G testing!! Close the border! Lock. Us. Down! We must eradicate this disease now!!

    Now is the time to panic!

    • Mark Hardwood

      People will work – cash-in-hand.

      Christian religious sects will explode, they will have all their followers/cultmembers on JobSeeker/UBI and just pocket the money.

      They are already doing this now with school funding. Look up Christian Fellowship.

    • Matt $550 per week does not include rent assistance.. so make it over $625 on your numbers.
      And yes, that is very close to minimum wage already – so if all they can get is a minimum wage job they very well may not be keen. Especially for full time work since $625 dole plus 10 hours minimum wage work would just about be over the rate of minimum wage alone.
      Rather than continually adjusting nominal Australian wages and welfare up to infinity if we ran with low migration rates (permanently), we’d be able to get by without infinity wages as we wouldn’t need them with fair priced property – for home owners, renters and businesses.
      We need to be competitive, not pay our people $100k per annum to wait tables and $60kpa on the dole.

      Most of the country doesn’t live in Sydney and its rents are an anomaly compared to the rest of the nation.

      • The Traveling Wilbur

        And… if Australia ran low immigration, which way do you think wages will go?

  8. That African American gentleman who died actually had c19. So his cause of death was actually solely covid. Add him to the tally.

    • Ah so the policeman with his knee on his neck ought to be in the clear for just resting his sore knee…

    • Know IdeaMEMBER

      Has the vibe of a WHS issue, while avoiding a diplomatic incident in suggesting there is a case (or two million) of the virus in North Korea.

    • Unfortunately, USA justice is not always colour-blind.

      When the Speaker of the Senate can effectively tell the boy (former USA president) he should not criticise the current president, we have a long standing problem. Interestly, McConnell actually apologised.

      • I have never seen a 5 minute murder published, like this on Twitter. I think it’s gunna change things in America, this is much worse than a split second decision to shot someone, he ( THE POLICE) kneeled on George Floyd’s neck for 5 minutes until he killed him, despite George’s repeated pleas that he couldn’t breathe, and eventually calling twice for his “mama”. Chilling crime caught live on camera.

  9. Interesting George Floyd murder BY THE POLICE and resulting riots leading Zero Hedge, but in the 51 st state it’s all property prices and ASX level. We are f_cked!

  10. Chinese legislation on Hong Kong passed. One brave soul voted against the motion. Not a good career move but that gets my respect.
    “The National People’s Congress voted 2,878 to 1 in favour of the decision to empower its standing committee to draft the legislation, with six abstentions.“