Macro Afternoon

See the latest Australian dollar analysis here:

Australian dollar drops as RBA talks it down

by Chris Becker

News of a potentially successful coronavirus vaccine is sending stocks higher across the region, with local stocks leading the way even as the Federal government slashes its economic stimulus package come September. Gold is soaring ahead as well to a new high while everything else except Yen is also rising against USD.

In mainland China, the Shanghai Composite has slipped after a big start to the week, finishing with a scratch session to 3316 points while in Hong Kong the Hang Seng Index is playing catchup, lifting nearly 1.8% to 25493 points. The daily chart shows a nice bounce off support and back above the 25000 point barrier:

Japanese stocks also returned to a positive mood, with the Nikkei 225 up 0.7% at 22884 points while the USDJPY pair is very slowly lifting back to its previous Friday position near the 107.20 level:

The ASX200 was the standout in the region, with a big surge that carried from the open to the close, finally finishing 2.6% higher to 6156 points while the Australian dollar was equally strong, lifting straight through the 70 handle and making a new weekly high:

Eurostoxx and S&P futures are up nearly 1% slightly going into tonight’s session as news of the Euro summit positive outcome and the vaccine will keep animal spirits going! The four hourly chart of the S&P500 gives a crystal clear breakout that has no risk attached whatsoever – everyone is going to go long and go hard from here until the next wobble:

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Comments

  1. ErmingtonPlumbingMEMBER

    I am first man in Rome!

    Well first man in Arvo links anyway.

    How Good was McCulloughs Masters of Rome series. The first 3 books all make it in my top 10 reads.

    Our Harry sure does remind me of that Metrobius character.

    • The Traveling Wilbur

      I so wish you had said Venice.

      A great example of what consequences can transpire if you don’t hire a licensed plumber the first time around.

    • ashentegraMEMBER

      McCulloch’s Masters of Rome was a fabulous read, ermo. I’ll read it again in a decade.

      Have you also read I, Claudius by Robert Graves?

      • ErmingtonPlumbingMEMBER

        When I was reading them in my mid 20s I had a Girlfriend who was reading I Claudius and she was raving on about how good a book it was and that I should read it.
        I was dismissive of her suggestion at the time due to thinking it wouldn’t be as good as McCulloughs work and would be disappointing by comparison.
        I’ve always meant to read it after we busted up.
        I might see if I can pick up a secondhand copy.
        I don’t do Kindle

    • SnappedUpSavvyMEMBER

      How many plumbers in Sydney can even read let alone…. you are not the average plumber, shame you don’t travel down south to the Chinese province of Hurstville 😁

      • ErmingtonPlumbingMEMBER

        I’ll do a job in Hurstville only on a slow week/day dependant on the type of job.
        Exceptions can be made for quality MB regulars and referrals.
        😉

    • A very literate person I know really rates her Rome series. I’ll have to check it out. I liked I Claudius but didn’t finish it because the poisoning, murdering own family members, evil children, scheming, killing the great unwashed, betrayals and treachery page after page wore me out after a while.

    • The post–post-Mao era has now begun Carl – ?????? – lmmao excessive use of thingy with a side of decrying his own lament at his imperial sparkle pony getting tattered.

    • Yes! It’s reasonable to assume that future engagement with China will be similar to the history of the West’s engagement with Stalinist Russia.

    • Chinajim – there may be some parallels to back then but Mao had Zhou Enlai with him all the way (and to a lesser extent, Deng Xioaping). Zhou was one of the most remarkable leaders of the 20th century and yet for some reason he was totally subservient to Mao. Xi has no-one, certainly no-one of the calibre of Zhou to guide him and to cover for him.

    • Scab Quarantine Security

      If you don’t want the stigma of the dole don’t apply for it!

      Someone has to pay for all this UBI right?

      • Someone has to pay for all this UBI right?

        Yes.

        Majorities in all three countries support taxing tech companies to fund it

        UBI supporters were asked if they were willing to pay higher taxes to fund such a program. Support for this varies, from 75% in the U.S. to 53% in the U.K.

        • That SBS article was talking just about a BI not a UBI. A UBI I am all for. Not just increasing the dole to a BI.

          I am not sure of her circumstances but single parent households (with the custodial parent not working) are always (and have always through history) been poor. Decisions like having kids have consequences.

    • and look there goes yet more unicorns flying marvelous arcs in the sky shitting rainbows of neo-liberal shite for all who want to inhale it.

    • His the last rebel smoke and noise dissappears he’s got carry on because his the last rebel like a winter leaf hanging in the breeze

    • You guys are crazy for wanting UBI. If you want that style of communism maybe try moving to NK, Russia etc. or the like. I prefer to work and have financial freedom and independence.

    • You’re right…the only big difference between Spain and Australia is tax rates….hmmmm….

      Too-low taxes tend to favour enrichment of asset holders and entrenched wealthy over those less fortunate.

      • The Traveling Wilbur

        And what part of “Troll” earlier required further expenditure of the little grey cells?

  2. AUD up because of EU stimulus package but somehow people missed the:
    – From 2023 there would be Tax on goods imported into the EU from countries with lower carbon emissions standards than the EU.

    Yes I know some will say.. Niko, 2023 is far far away.. but it’s not when you sign long term supply contracts.

  3. we attended 50th birthday party on Saturday and wife started coughing real bad last night. Just went to get tested.

    • Dad got tested today. He hasn’t been anywhere recently except to pick up click and collect groceries and the mail. I’m hoping it is just an old man working outside on maintenance for too long. I hope your wife has a genuine negative result and is feeling better soon.

        • Thanks! I’m not stressing yet. There we’re 4 new cases on the peninsula today, but current numbers are low so I doubt he’s got it. I’m all for not stressing until it’s warranted 😊

      • Fingers crossed for your Dad anyway.
        I’ve read the following are good to take as preventative or restorative:
        Vit D up to 5000
        1000 mg Liposomal C x 3 (more easily assimilated)
        Zinc
        Quercitain
        Niacin
        Chicken bone broth (cook 4 chicken frames 24 hrs in slow cooker, ad flavouring/veg) is nutritious and a good restorative.

        • Thanks for that. He’s ok. I actually take most of those, except for the quecertain, because with my CFS my metabolism doesn’t do the metabolic cascade thing so I’m on all these activated minerals and vitamins. I did several multi day water fasts during lockdown 1.0 in an effort to spring clean the body and kickstart my immune system function. I felt a lot better immediately after which was great. I think there are a lot of ways people can boost their without too much effort which is a good thing to do if a person is motivated and able.

          • Too right there’s so much we can do to make ourselves stronger. Good on you for the water fasts, that takes a bit of discipline.

            Glad your Dad’s ok too. Stay safe.

    • The Traveling Wilbur

      I hope everything is ok too. And if it doesn’t look like it is, nicotine spray and vitamin d tablets are NOT going to do any harm. Nicotine spray is awesome btw. If I hadn’t gone sober to get off cigarettes I’d still be on it.

    • Update on my best man from wedding and his family. They are mostly over it with minor symptoms. Little cough and headache. No fever, but he did get night sweats. He’s mid 40s. Not very fit and actually has Oxygen at night to help with his sleep apnea so I am surprised he didn’t suffer with it more.

      But we still don’t know why some people are so badly affected and others only mild or nothing..

        • And what’s so interesting about that is said friend is overweight, (hate to say it but probably somewhat obese) and doesn’t eat things that are very green or rainbow in colour. Mostly brownish like KFC etc.. so he should in theory be more impacted and doing more poorly. But hasn’t been too badly affected by it, other than cold/flu like symptoms.. but no worse.

  4. Everyone, which is a grand total of 2, who I’ve spoken to today thinks the jk and js changes today are bad news for the economy. One person I spoke to said if they were a small business owner they’d sell thebusiness, sell the house and conserve whatever capital they had and re start a business in a few years

    • interesting. I thought changes would have create more cheap labour and businesses would love that.

    • yeborskyMEMBER

      I think pretty much everything’s bad for the economy at the moment. We are truly in sheepdip. I’m not an economist’s shoelace but it all seems to me to just be delaying the inevitable.

    • Mining BoganMEMBER

      Well, I’m working in a world where everyone thinks they’re rorts for bludgers. Also that masks don’t work against WuFlu, which is a conspiracy anyway. Also scholl teachers are paid too much to sit at home and not catch WuFlu, even though it’s conspiracy and they’re not sending their kids in to get sick, and that high power prices is because of solar power, but not the panels on their roof type solar power that aren’t getting the same monetary kickbacks anymore because bastard Greenies. Apparently.

      Yeborsky is correct. Everything is bringing this ship down, and it’s everybody else’s fault!

      I had a sh!t day listening to dullards.

      • I feel for you. Has to be tough surrounded by that sort of mentality, obviously no one there is capable of critical thought (didn’t you say you worked in some sort of gov organisation?). My parents are absolutely furious with the changes. I think that comes from being self funded retirees who are ex primary school teachers who lost a pension under Abbot, don’t have franking credits, IPs, or even a bloody health care card and who have to financially support an adult child with an invisible disability. The anger is strong in the poppy household tonight over the fact that jk is so much higher than js for people in the same situation, ie not working. Me, I expected something like this so I’m not upset. I just think it is now crystal clear the Libs will screw up managing this economic downturn and they will make it much worse than it needs to be, which means more jobs will be lost than necessary. I just have to figure out how to keep my house deposit (and will that disqualify me from js after Sept?) so that I can keep a dream of home ownership alive, because that dream is the only thing giving me hope about my life long term atm (and yeah I’m aware that everything going on is only a temporary disruption to our lives and that things will get better eventually and go back to some semblance of what we had before).

        • Ughhh I feel your pain. On the how to protect your purchasing power amongst all this, but also not qualify for JS because you were prudent to save money. Where as those saturated in debt living paycheck to paycheck qualify? And you’ve spent several years paying into a system that turns it’s back on you when you actually could use it..

        • If you’re trying to keep your deposit from prying eyes, have you thought of converting it to gold? You can buy (or any friends/family on your behalf) $5,000 with cash payments which are not traceable. 4-5 friends/ family you can trust, each buying $5,000 each week over a few months…..sell it back when the time comes the same way, all untraceable, and gold is a safe bet atm

          • I’ve got a stash of PMs at the Perth Mint, but it definitely isn’t hidden from their view. I am starting to think that because the olds don’t get anything from the gov as self funded retirees and given that I live with them I might look at giving them some cash to look after, but first I need to know what the asset testing threshold will be. The annoying thing as a single mid 40s female with a debilitating enough chronic illness that means I can’t handle stress and I can’t work full time (but I’m not debilitated enough to get gov support) I’m sort of stuck. No bank is going to lend to me given the industry I’m in (sports and rec) at the moment, and possibly not for quite some time. Therefore I almost need to be able to buy outright, which means at least 300K. So that asset threshold could seriously become an issue as a mortgage on what has been an accepted scale is suicidal for me. I’m not sure if I should put more money into PMs and gamble that I can use that as a springboard to more RE purchase bang for my buck, but that will take a few more years to play out. so much to consider…

        • @Popcod (post below this one)
          Sorry about your situation with your parents and CFS. You are in a tough situation. I think if I were you I’d wait a bit and maybe if there is another PM dip, buy some more physical. Although rural property is popular now, I don’t think it’s going to last with what’s coming. I’m pretty much of bcn’s thinking that this will be very bad.

          I sold my Gippy property as I said, and bought in Melbourne, then worrying over a price crash, sold it in Feb 2019. I’ve put everything into PMs (!) but will buy again, just waiting for the place I want to drop in price. Meanwhile PMs are doing well!

          I know some on MB say PMs are at the top and to be very careful, however I bought them in 2005 and doubled the value over the next few years. I’d sold it by the time it crashed but am aware a drop is always a possibility, for many reasons think it won’t for a while as this time it’s so much worse t and as there is absolutely nowhere else safe to store cash. The links below might help you if you haven’t already seen them.

          https://damnthematrix.wordpress.com/

          https://www.youtube.com/watch?v=y9gBrUNALJc&feature=emb_rel_pause

    • SnappedUpSavvyMEMBER

      You cannot sell a small business on JK right now, not even Nathan Birch could sell it

      • I think this person was thinking more of liquidating the business rather than selling it. I should have been clearer in my wording but I’m so tired today. Thanks for the clarification though!

  5. NEW ZEALAND …

    Heather du Plessis-Allan: Jacinda Ardern vs Judith Collins – Round 1 to the PM … NZ Herald

    https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12349821

    COMMENT:

    Round one goes to the PM.

    She got the better of Judith Collins in the house today.

    This was the big match-up. The first time we were going to see Judith go up against Jacinda. And people were clearly tuning in. Question Time was streaming on most of the major news sites, the parliamentary website became difficult to log on to, and apparently the press gallery was full. … VIEW & READ more via hyperlink above …

    • BrentonMEMBER

      Is it bad that I’ve never even heard of Judith Collins before?

      Brb googling…. ah right, became leader of the opposition like yesterday and there’s only 2 months until the election.

      Arden would have to be a shoo-in at this point.

  6. RE falls seem to be accelerating and now that news is out that JK and JS allowances will be reduced will push more people to sell, my call is we will see another 10% price falls by Christmas.
    Meaning, we will also see reduced asking prices and lot of Urgent Sale, Motivated Vendor, Reduced to Sell..

    • On 7 News tonight lots of hoohar about prices not falling by more than 3% and certain suburbs up due to lack of supply. Quotes my area as up 15% YoY and a few others (mostly Blue Chip). Very selective data.. I can’t link to it yet. Will so that later. REIV or something was source of data.

      • Arthur Schopenhauer

        Pretty much means they are in free fall elsewhere.

        Nothing much for sale in 3079 or 3084. Those that are on the market are rentals or blings gone bad.

        • I just finished watching Martin North’s household stress live stream. He did his postcode mortgage stress thing. Ouchies!!! Some postcodes have 80% mortgage stress, 50% rental stress and approx 50% investor stress. I’m sitting here thinking if I was in the market for real for buying his USD 50 per month patreon to get access to that complete database sounds like money well spent to help with negotiations

          • I honestly believe it is money well spent either way. I donated to MN a few times. Since we need more independent media.

    • Yeah apparently rents are up in Perth. Go figure. How or why is what I want to know.

    • Scab Quarantine Security

      Most people have convinced themselves there’s a vaccine coming in the next 12 months, and if the vaccine doesn’t come it will just burn itself out in 2 years LOL

  7. BrentonMEMBER

    With everyone setting the printing presses to overdrive, it definitely appears to be impacting commodities. Silver was today’s champion, but you could have picked just about any commodity and turned a tidy profit.

    Got to feel for consumers. They’re being rag dolled on every front. Feels like stagflation in the making.

    • Jack Ma is about to float his Ali Baba – largest listing in history – and it wont be on US exchanges but Chinese.

      Gigantic push against the USD – same with the Euro announcements aimed squarely at USA.

      • Er it was u halfwit Americans let Ray the red trap u halfwits they eat you from the inside out Eh lol anyways the tards won’t notice the change over and the quite the uppity rich are finished run forest run

    • Arthur Schopenhauer

      We need a corona stimulus MB comp. Who can bag the best % return on a portion of the stimulus Cheque.

    • Scab Quarantine Security

      I’ve been on silver since late March. Going to take a small punt on palladium tonight.

  8. Interesting article today about copying New Zealand- country with the population of Geelong+ a bit..

    Quite frankly it would be a ridiculous disaster if they didn’t have it sorted in a matter of days – and frankly surprised it took this long.

    Now – lets look at the cost – their Government debt ($58 Billion) is expected to top out at $200 Billion within 5 years.

    The last time this level of debt was incurred was after the 89 recession which sent New Zealand into the dark ages. But there was one thing different back then – private debt in New Zealand was 20% of GDP.

    WHAAAAAT !!!

    Who wants to guess what its private debt is now that housing is more expensive in the most remote isolated least populated western country on earth whose only export is butter ?

    Yeah 160% of GDP racked up in the Popnzi Jenga !!

    Of course things will be great for 5 years, or even 10 – but gee I hope nothing goes wrong economically in any way shape or form for the 50 years after that – because thats what economists are forecasting for the albatross of debt hanging on your kids necks.

    Its kind of like watching your parents flog you off in a cheap dowry swap for a half eaten cheeseburger and hand shandy.

    Go for it Jacinda – should be fun to watch.

    • To be fair NZ is bigger than WA, SA and NT combined. You could nearly even squeeze Tassie in there and NZ would still be bigger.

      Aus population is Qld, NSW, Vic. In fact, NSW + Qld = 50% of the population.

      • Lols – exactly – South Australia is the size of Houston and WA the size of Dallas – literally. Two cities. NT ist he less than the four largest suburbs of Melbourne.

        Holy shit – quite frankly they shouldn’t have had a single case.

        Now – they will never recover financially.

    • and we are not exactly China population wise. In my view it comes down to being smart or stupid and we are the later.

    • Arthur Schopenhauer

      To translate:
      – they are picking it up in the sewage
      – there are not enough testing places or tests to cover the known spread
      – the tests are not 100% reliable and there are a number of false negatives ( a small % of a large number of tests is significant)

      • Rowan McKenzie

        If its spreading as indicated by sewage testing, but no one is dying and the hospitals aren’t full, who cares? Sounds like free herd immunity.

  9. Well this whole border crossing ( vic/nsw) is going from a joke to angry very fast. I think there is only one more straw to go on and it could get ugly quickly.

      • So us simple country folk thought that our smart city cousins would be able to manage this without to much fuss. Surely the great city-states of Sydney and Melbourne would be able to work out a common sense approach to this problem. So what did they come up with in my regional city. Firstly they didn’t speak to any local leaders at all. They then decided to put the check points in the busiest spot, think Sydney Harbour bridge or the West Gate bridge in Melbourne. Then instead of using the 4 lanes that were available they shutdown 2 lanes to all traffic and then merged the other 2 lanes into 1 so that they could have parking even though no less then 200m away there is car parking as well as a cricket ground that could have been used. At the same time they made a dog’s breakfast for the trucks trying to go along the H’way adding hours to their journey which chews into truckies driving hours causing massive issues. On some of the smaller crossing they have just dropped massive concrete blocks with no regards to how that community functions. So after a lot of community frustration which was directed at the local state members, we were told changes were being made and would come into effect tonight. No more 50km zone for locals, it will be 2km all along the border. So I can drive along the border for hundreds of km, but if I drive to the wrong part of town I have to self isolate for 14 days before crossing the border again. There are schools which fall out of the zone a couple of hundred metres that are sending teachers to collect kids so their parents don’t breach their border passes. The most frustrating thing is that the common sense approach was always to have the check points just north of the border or south just like our community leaders wanted.

        • Rowan McKenzie

          Get 100 people into a mob and just storm the border – do that a few times and problem solved. How do you think the Berlin wall fell? What are they going to do, shoot you all?

    • DingwallMEMBER

      Meanwhile people are resorting to trying to sneak across the QLD border …. via SMH

      Queensland police have fined a NSW man after finding him in the boot of hatchback on the state border at the weekend.
      The vehicle was stopped for a search at Wallangarra, about 250 kilometres south-west of Brisbane in the Southern Downs, just before 7pm on Sunday.

  10. Who said Scummy wouldn’t let a good pandemic go to waste:

    “Josh Frydenberg watered down company disclosure laws despite Asic warning against it”

    Investor fears have ramped up this week because the groups that lobbied to water down the rules, the Business Council of Australia and the Australian Institute of Company Directors, are now pushing to have them made permanent as part of a campaign against shareholder class actions.

    https://www.theguardian.com/australia-news/2020/jul/21/josh-frydenberg-watered-down-company-disclosure-laws-despite-asic-warning-against-it

    “Sports rorts: Coalition approved at least six grants without an application form, documents reveal”

    Fresh details have emerged about the government’s so-called “sports rorts” affair after new documents revealed at least six grants were approved by the minister despite no application form for the money being received for them.

    https://www.theguardian.com/australia-news/2020/jul/21/sports-rorts-coalition-approved-at-least-six-grants-without-an-application-form-documents-reveal

    • Seems like a lot of effort to go to – planning a pandemic – just to protect Bridget McKenzie

      • desmodromicMEMBER

        We committed to spend $50B on submarines to get Christopher Pyne re-elected. Then the ungrateful bastard resigned from parliament.

  11. RBA Watch: The Lowe Down on Magic Money

    https://theglass-pyramid.com/2020/07/21/rba-watch-the-lowe-down-on-magic-money/

    It had to happen.

    Once Alan Kohler was talking up the wonders of Magic Money on national television, it was only a matter of time before the RBA would strike back….hard. After all the RBA has a state / private bank monetary cartel and the interests of very large wealthy corporate stakeholders to defend.

    Sith Lord Governor Philip Lowe chose the annual Anika foundation speech as the opportunity to instruct the assembled young banking industry Padawans on the importance of remaining loyal to the dark side of the monetary force.

    • The Traveling Wilbur

      LOL. I know someone who named their kid, and was influenced by it, Madison. Short shelf life.