Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

A surge in Chinese shares is spurring on risk appetites across the region, with stocks lifting strongly this afternoon, taking risk currencies like the Australian dollar with them but leaving gold and the ASX200 behind. The reason behind the catalyst is unclear, apart from a technical one – its a five year high for Chinese stocks! Momo and fomo to the max…

In mainland China, the Shanghai Composite is up 5.4%, yes over 5% higher in a day to 3324 points while in occupied Hong Kong the Hang Seng Index shout out the gate by over 3% to 26195 points, with the full session clear off the uptrend of the former weekly highs throughout June and May:

Japanese stocks put in good sessions too, with the Nikkei 225 lifting 1.8% to 22714 points with the USDJPY pair finally found some life, gapping down slightly before re-engaging and lifting up past the mid 107s and staying there going into the City session:

The ASX200 was the odd one out, opening down in line with SPI futures, then peeping above the scratch level at lunchtime before selling off in the close as the Victorian border closure dampened risk appetite, closing 0.7% lower at 6014 points. The Australian dollar however shoved into a higher gear, almost hitting the 70 handle after a solid start to the usual Monday morning gap, matching the previous weekly high and getting well overbought:

Eurostoxx futures have caught the Chinese bug (no, not that one) and are up over 2% and S&P futures are up at least 1% higher and will play catchup after the long weekend:


Farewell Ennio Morricone……( a selection of his finest films scores)


The Good, the Bad and the Ugly



A few dollars more


Once upon a time in the West


The Mercenary


The Sicilian Clan


Once upon a time in America


The Mission


Cinema Paradiso






The Hateful Eight







Latest posts by Chris Becker (see all)



    Since March the number of people leaving this country has exceeded those arriving by a substantial margin … Greg Ninness … Interest Co NZ

    More people have been leaving New Zealand than have been arriving, since lockdown restrictions began in earnest in late March. … read more via hyperlink above …

  2. call me ArtieMEMBER

    Not sure about you, Chris, but I’m expecting sleep to be interrupted by alarms tonight. It’s interesting but I can’t understand it at all myself. AUD is at values last seen when interest rate spreads to USD were significant. Now spread is zero. Go figure

    EDIT: I took out a reference to a specific % spread that I realised I was not certain about

  3. On 4 Corners tonight the story will be about a number of residents in Cobargo still struggling after the bushfires ripped through the town (link to ABC is getting marked as spam).

    The first couple are the Ronnie and Trevor Eagle:

    When Ronnie Eagles explains what she’s been using for a toilet for the past six months, she puts on a brave face.

    “I did dig the old-fashioned toilet,” she said.

    The pit toilet sits near the borrowed caravan, where she and husband Trevor are spending the winter.

    “I can put a tree in it afterwards and close it on in, and I’ll have a good tree then,” she joked.

    With no running water, a plastic grain drum serves as their wash basin.

    Every few days they drive 25 kilometres into the town of Cobargo to have a proper shower at the public bathrooms.

    The cost of petrol makes more frequent trips difficult.

    When the Eagles purchased the property six years ago with Trevor’s superannuation, they hoped the profits from the farm would see them through retirement.

    It’s all been wiped out.

    All very sad….until this very Australian phenomenon:

    They own a house near Sydney but need to stay on the farm to look after the animals that survived the fire.

    Like many locals without insurance, they are faced with the prospect of relying on grants, donations and help from the community to rebuild.

    I am loathe to criticise anybody who has been through such a horrible experience of losing their home, but isn’t this just typical of the rampant sense of entitlement in this country? I suppose they don’t want to just give the house in Sydney away.

      • Yeah, but they didn’t insure their go. So they’re holding on to their go in Sydney while taking another go from other people.

        • happy valleyMEMBER

          But they had a go and SFM never said that I can remember that you had to do anything else (including something sensible) to get a go – indeed, that would be inconsistent with Strayan culture and the rules of the game of mates and game of rorts?

    • So they’re pleading poverty while having probably a million in physical assets? Fck ’em.

    • DominicMEMBER

      Shocking. Underlying this all is: “I need to leave something in my will to the kids”.

      Said otherwise, I’ll need a taxpayer bailout in order to leave something to my kids.

  4. Anyone see St. Jacinda announcing no more sugar after September 1st? As if…

  5. Australian Industry Group chief executive Innes Willox said the border closure was “ill-considered” and would pull the rug out from under the economic recovery.
    “The border closure puts up a Berlin Wall between our two biggest states which represent more than half our national economy, and cuts in two our country’s main economic artery,” he said.
    “It is a sledgehammer approach when what is required is focused strategy that is community and hot-spot based and not based on arbitrary borders that split communities. It is a Ready-Fire-Aim approach where communities are all dealt with in the same way regardless of their level of risk.
    “Despite any promises that may be made by the states to keep businesses operating across borders it can be guaranteed that the economic disruption will be immense.
    “Albury-Wodonga is a freight hub which will now be divided by a ‘show me your papers please’ mentality.”</I?

    • Bear Bullwinkle

      So much of mass migration seems to be based on avoiding some sort of “mentality”. It seems any restriction on migration for any reason is akin to the Berlin Wall.

    • His whines make me happy.
      Oh I wish I was a fly on the wall at Harry T’s right now.

    • I am GrootMEMBER

      Onya Innes. Of course you’d know better than everyone else involved in this decision.

  6. call me ArtieMEMBER

    I don’t think the State Governments CAN close the border, legally. It is outlawed in the Australian Constitution. Being unconstitutional is about as water-tight as a rebuttal to a law can be
    Section 92 of the Constitution of Australia

    That the trade and intercourse between the Federated Colonies, whether by means of land carriage or coastal navigation, shall be absolutely free.[6]

    Henry Parkes, speaking at the Constitutional Convention, in explaining the nature of his proposal:

    I seek to define what seems to me an absolutely necessary condition of anything like perfect federation, that is, that Australia, as Australia, shall be free — free on the borders, free everywhere — in its trade and intercourse between its own people; that there shall be no impediment of any kind — that there shall be no barrier of any kind between one section of the Australian people and another; but, that the trade and the general communication of these people shall flow on from one end of the continent to the other, with no one to stay its progress or call it to account.[6]

    • Don’t be a dunce. That stuff is about states not imposing duties on inter-state trade.

      Free doesn’t mean you can come and go as you like. Nor does it mean Cntass can’t charge you money to take you from Sydney to Adelaide.

      Free means movement of goods free of tax. And so it is, free of tax.

      You’re welcome.

    • call me ArtieMEMBER

      My last comment. I hope this is a useful clarification. Politicians may make laws preventing or mandating anything they wish, but the constitution says they CANNOT do it purely on the basis of States. That is why they cannot constitutionally close a state border.

      • call me ArtieMEMBER

        However, see comment by triage (above) which is pretty definitive in reference to High Court decisions on this matter

    • reusachtigeMEMBER

      Look, I’m all for free intercourse but I also don’t mind paying for a professional.

    • It’s like when the American forefathers wrote into the constitution “the right to keep and bare arms” did they imagine you had the right to own an M4 or AK-47 to go brass up kids in school. Same with Parko, reckon he’s say shut the boarders, public health comes first.

    • Yes, the uniform tax case illustrates just how far that part of the constitution can be interpreted.
      I have no doubt state border closures are not contitutional.

    • Ronin8317MEMBER

      The US legal system is very different from the Australian one, so don’t assume the Commerce Clause have the same weight in Australia. Look up Coles v Whitfield.

      The High Court of Australia have decided once and for all they have enough of stupid lawsuits over s92 and neutered it.

        • CoVid can live for up to three days on certain surfaces and most road freight can travel between Vic and NSW within three days. Just sayin’.

    • drsmithyMEMBER

      The Wikipedia page on this seems to cover everything.

      “trade and commerce” includes “the mutual communings, the negotiations, verbal and by correspondence, the bargain, the transport and the delivery”,[12]
      “intercourse” is the ability “to pass to and fro among the States without burden, hindrance or restriction”,[13]


      Intercourse under Nationwide News
      In Nationwide News Pty Ltd v Wills, the following test was given by Brennan J. (as he then was) to determine whether a law infringes the s. 92 guarantee to free intercourse:[36]
      * whether the law is enacted for the purpose of burdening interstate intercourse.
      * if the law is enacted for some other purpose, whether it is appropriate and adapted to the fulfilment of that other purpose, but a law may be found to be enacted for the prohibited purpose by reference to its meaning or effect.
      * where a law imposes a burden by reason of the crossing of the border, or it has the effect of preventing or impeding the crossing of the border, it will be held invalid if that is its only or chief purpose.
      * the above are subject to permissible regulation which might take the form “of excluding from passage across the frontier of a State creatures or things calculated to injure its citizens”, but the severity and need for such measures must still be assessed.

      So the intent is what matters. Is the intent of the border closure to “burden interstate intercourse” (remembering the context here is trade and communications) ? I would say no.

      (That said, I am not by any stretch a lawyer.)

      EDIT: Looks like this was covered on The Conversation, by an actual Constitutional lawyer.

      • If you can ban someone from leaving an high rise tower it would be weird if you can’t ban other people from entering a state.

      • I would respectfully suggest: The fact they are letting cargo trucks through shows they are not seeking (primarily) to restrict trade and commerce. They are trying to enable it as far as possible while putting health measures in place.

    • The Constitution of Australia: A Contextual Analysis by Cheryl Saunders is a good read (and readable) on the constitution. Covers this and other what-ifs well.

  7. DingwallMEMBER

    Are the Chinese thinking “anything Trump can do, we can do better”? Insanity reigns……………

    A front-page editorial in the Securities Times on Monday said that fostering a “healthy” bull market after the pandemic is now more important to the economy than ever.

    but what they really mean is “now more important than the economy

    • Bear Bullwinkle

      I thought they were more into real estate in Chinar.

      But yes, in order to fend off a French Revolution sort of scenario, it’s important to have upper middle class welfare via the stock market.

    • DominicMEMBER

      This mentality should be no surprise. We are in the final furlong of monetary destruction.

    • Reus's largeMEMBER

      Does not change the fact that the CCP’s failure on every level of this has let the genie out of the bottle, it is time for sanctions on the Chyna and bring the CCP to heel, it is time for them to kiss the feet of the rest of the world.

      Note in a few weeks when it comes out that the “expert” is shown to have been paid by the CCP to release that study.

    • oooo you think the solar minimum stuff woke up this sleeping alien and it came for all of us??
      This is a page turner this one..

  8. Just saw a story on the lock down public housing blocks in melbourne. They are chock full of v1brants. So we have tens of thousands of poor australian citizens waiting 10-20 years to get public housing, yet we let new v1brants into them as soon as they enter the country?

  9. @timmeh – I’ve heard that different tower Melbourne have different communities. Those ones in Flemington are mainly refugee families, other blocks might be more local. I have also heard a block near Lygon at is quite dangerous with a lot of drug users and nurses could not go in there alone (source, a nurse but this was a few years ago)

    • I am GrootMEMBER

      Are you suggesting that some authorities segregate some cultural groups from each other?

      Surely not.

  10. DingwallMEMBER

    We advise against regarding uncertainty as a reason for exiting markets. Instead, we see ways for investors to cope with uncertainty – including averaging into markets – or even take advantage of volatility,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

    ie please keep trading so our bots can keep making vast amounts of dough

  11. You know the best thing about these public housing high rises…. when the govt turns around to bail out developers by buying their high rises for publis housing in a few weeks, there will be a few eyebrows raised…

    • I am GrootMEMBER

      Not necessarily – those two things will happen in different 24 hour news cycles.

  12. Mining BoganMEMBER

    Why is it in every submarine movie there’s a scene where the cap’n orders the sub to dive to ridiculous depths to avoid attack? The chief always questions the decision but then does what he’s told. Then a very close depth charge barrage and Bob’s your uncle. Every. Single Time. And none of them compare to the claustrophobic scene of Das Boot.

    Watching this garbage is the same as reading Reserve Bank minutes.

    • GunnamattaMEMBER

      Just reading your comment had me thinking first of how many submarine movies are pretty claustrophobic, and then (having actually been on a Submarine [for a couple of hours] – Collins Class whats more, back in the days when they used to crash test them against the piers in North Adelaide) concerning myself about the implications of social distancing on a sub. There might be a market there for really efficient air filters if anyone knows anything about them. But I reckon that might be the end of hot bunking (dunno if they still do it but they were then). And someone will need to do a fair bit of thinking about the mess arrangements too – my recollection was it was a seriously small room where everyone chowed down.

        • bolstroodMEMBER

          My God father was a midget Submariner during WW2, C.E.T. (Jim) Warren.
          He wrote a book about his experiences called “Above Us the Waves “, it was made into a movie in the “50’s.
          He wrote another book about the loss of a submarine in unauspicious circumstances called “The Admiralty Regrets ”
          After the sacking of the US aircraft carrier captain for speaking out publicly about the plight of his crew with the Corona Virus I wondered about what was going on in the Sub Fleets.
          Our RAN cannot get enough volunteers to crew the Collins Class subs.
          Who would want to go to sea an unseaworthy sardine can ?