Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

by Chris Becker

Risk is taking a nosedive going into the afternoon session here in Asia in the wake of Trump’s executive order around another Chinese app, with USD coming back against most of the undollars and stock markets getting very nervous before tonight’s US unemployment print (NFP). Gold has surrounded some ground from its record high above the $2070USD per ounce level overnight, but its silver that’s floundering, off by nearly $2USD per ounce after almost hitting the $30USD per ounce level:

In mainland China, the Shanghai Composite is falling sharply, down over 1% to 3337 points, while in Hong Kong the Hang Seng Index is in full reversal, down more than 2% to 24364 points. Japanese stocks are also moving lower, with the Nikkei 225 falling 0.7% to 222548 points as Yen buying abates a little with the USDJPY pair holding steady for the past 48 hours just above the mid 105 level:

The ASX200 is playing ball and not being the odd one out in the wake of the RBA SOMP, taking back all of its previous gains and then some to be down over 0.7% going into the close, currently at 6000 points exactly.  The Australian dollar is down from its weekly highs overnight, just clinging on to the 72 handle:

Eurostoxx and S&P futures are both retracing with the S&P500 four hourly chart still showing no signs of reversal as this weeks trend gets booked in before the NFP tonight:

Have a good weekend, stay safe and a free biscuit to those who get the meme of the day, dark as it is….

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Comments

      • ErmingtonPlumbingMEMBER

        Well even if they haven’t their announcement will be a measurable PR victory

    • Arthur Schopenhauer

      The 2 weeks pay they announced at the start of the week must have gone over like a lead balloon on social media, or the state government made it a condition of keeping stores open.

      It’s so hard being a monopoly. /sarc

  1. interesting action with REE and TTM.
    Kincora is going to drill lot of holes around Trundle and not sure what caused the TTM buying – perhaps insider trading as they are about to release assays.

    • I’m wondering if all the explorers might be starting to bottom out and any good news on new projects might be looked at favourably by speculators if the metal run continues. eg CZN, PAN, ORN . I have no idea, just speculating myself but CZN talking up a Canook lake prospect and ORN Sth African prospect. I suppose this goes on all the time, as skippy says ‘salting the mine’ but we are potentially in the beginning of a major bull market for commodities. I have no idea if it will start or has already started or if there will be a pull back, just saying I’m trying to watch closely whenever I get spare time what’s going on in the commodities space particularly anything metal and of course the USD, Fed printer and fiscal spend.

  2. – There are clear signs that stocmarkets in the US are running out of steam. The main stockmarket indexes (S&P 500, Dow Jones, NDX, Nasdaq) kept rising since the bottom in March. But anyone who looks deeper “under the bonnet” knows that since say mid june fewer and fewer stacks participated in the rally.

      • – I look at e.g. the % of NASDAQ stocks above their 50 day moving average. Tickersymbol $NAA50R (stockcharts.com). Compare that with the NASDAQ itself.
        – When I look at the charts of silver & gold then it’s clear what’s going on. BUBBLE !!!! These 2 things went up too fast.

        • So, er, US stocks were in a bubble back 2015 already but are not now apparently, Despite being orders of magnitude higher since. But gold stocks are in a bubble on the basis of a solid run these past few months? Not to mention a large hike in gold prices? Right, got it.

          All makes sense!

          The gold run has barely begun – just saying 😉

          • – From early 2015 onwards the DOW Theory chart continued to give warning signals that the markets were “toppy”/”bubble”.
            – I like to quote here the great J.M. Keynes:
            1) Markets can remain irrational longer than you can stay solvent.
            2) When the facts change I change my mind. What do you do Sir ?
            – Talking about Deflation: Martin North (DFA) has pointed out that in A LOT OF postcodes (VIC, QLD, NSW) A LOT OF houses, units are already down by some 10 to 15%. This info is available from several property webportals. “Search and thy will find”.
            – Remember what I said ? Falling prices are required to get Deflation. Well, here we are.

            – Did you read the following thread ?
            “Australian households are delveraging at astonishing rate”.
            https://www.macrobusiness.com.au/2020/08/aussie-households-deleverage-at-astonishing-rate/
            DEFLATION anyone ???

        • Let me make this simple for you:
          If the US money supply increases 25% and the gold price in USD goes up 25% where has gold actually gone in real terms? End of lesson. Grade 5 economics.
          I’ll give you a little clue – US money supply is presently inflating at a rate of 30%! Ya think gold is in a bubble?

          As for inflation and deflation, let me help out: inflation is a monetary phenomenon – rising prices are a symptom of inflation. They don’t cause inflation and they are not inflation itself. Deflation is the mirror image of that dynamic. It is monetary in nature and falling prices are a symptom, not a cause.

          • – Yes, gold & silver are indeed “bubble”. Just look at the silver-gold ratio. I hope you know the meaning of this ratio.
            – And that silver-gold ratio is also a sign the stockmarkets are “overbought”

          • – The FED can easily (literally) print (/ create) money to the tune of say $ 50 trillion and don’t cause any inflation. But then the FED should make sure that all that money is being used to repay all the outstanding debt.
            – Unemployment here and in the US is rising and that’s (very) deflationary.
            – Money is fleeing from both Argentina & Turkey. = decrease of money & credit = deflation(ary). That’s why the currencies of those countries is falling and imports become more expensive. That makes it more likely that more households and companies default on their (mortgage) loans = Deflation.
            – Have you seen how low the debt-to-GDP ratio is in Argentina ? Every Household here in Oz would LOVE to have such a low ratio !!!!
            – And that’s what the inflationistas and the austrian school nutcases are overlooking and then draw the wrong conclusion(s).

        • ” Yes, gold & silver are indeed “bubble”. Just look at the silver-gold ratio”

          How can a ratio between two prices prove that BOTH are in a bubble — even if the gold and silver prices were at their lowest in history the ratio could feasibly be the same as it is now. The ratio tells you nothing about absolute prices, just relative prices.

        • “The FED can easily (literally) print (/ create) money to the tune of say $ 50 trillion and don’t cause any inflation. But then the FED should make sure that all that money is being used to repay all the outstanding debt.”

          – Er, no, printing $50 trillion would almost certainly lead to hyper-inflation.
          – If it chose to go down that path it wouldn’t need to ‘make sure’ debt was repaid, it could just buy the debts off all lending institutions and retire them. The lending instos would then write to the debtors and say Your debt has been cleared by the Fed.

          Before the GFC, base money (high powered money) was $870bn …. and you’re saying if that figure were to rise to $50 trillion there’d be no inflationary impact?

          • – No, printing $ 50 trillion won’t cause Hyper-Inflation. Because the FED would print the money (agree, that’s inflationary) and then with that money all outstanding debt would be repaid (= DEFLATIONARY).
            – The US bank JP Morgan Chase wrote off some $ 8,2 billion on their loan portfolio (=deflation). And there are MUCH MORE “write offs” to come. (=deflation).
            – Why do the austrian school nutcases ALWAYS blame the FED (or the RBA) for everything that goes wrong ??? In mid 2008 the FED’s balance sheet stood at ~ $ 850 / 880 billion (= $ 880 billion of debt created). But total US debt stood – at the same time – at ~ $ 56 / $57 trillion. $ 880 billion (of debt/money) is LESS than 2% of $ 57 trillion. And the austrian school nutcases blame the FED for “blowing up” a (debt) bubble ??? you should blame all the commercial banks. Like a Goldman Sachs, J.P.Morgan Chase, Wells Fargo, Citigroup, …………

    • “printing $ 50 trillion won’t cause Hyper-Inflation. Because the FED would print the money (agree, that’s inflationary) and then with that money all outstanding debt would be repaid (= DEFLATIONARY).”

      No it’s not and here’s why: I own a house that is valued at $1m and have a mortgage of $800k, meaning equity of $200k. The central bank pays down my loan (a debt for equity swap) and I now own the house outright and have $1m of equity. I buy a home for $2m with 50% down, LVR 50%, instead of 80% prior. If everyone does it, house price inflation would be off the dial.

      Today’s loans are intended to be paid off with future production. Paying them off with printed money dilutes the value of today’s money and sends the prices of real goods through the fcking roof. People are not stupid – when they see the gubbermint is printing to pay its bills they’ll know it’s effectively broke.

      Austrian ‘nutcases’ blame the Fed for bubbles because the Fed sets interest rates that the banks can borrow at, so the Fed is fountain that gives life to bubbles. The Fed and commercial banks are tied at the hip

  3. haroldusMEMBER

    Sometimes I don’t get this world. There are areas he couldn’t do this in France.

    White shirt sleeves rolled up, Emmanuel Macron waded through cheering crowds in the devastated streets of Beirut earlier today where disaster survivors pleaded with him to help get rid of their reviled ruling elite

    I wonder if this is enough for the population to have a coup for secular rule? That seems to be the subtext of the interviewed. Although, let’s face it, it’ll probably go the other way.

    Would be ironic though if this started a reformation.

    https://www.dailymail.co.uk/news/article-8600705/Leading-Lebanese-politician-blames-Hezbollah-corrupt-government-catastrophic-explosion.html

      • I think after years of watching some bang on about – things – and constantly proven wrong to be the most hilarious – thing – ever.

        Being lost in some narrative wilderness without a crumb trail or compass can do that.

        • reusachtigeMEMBER

          Hey, I might have no idea what message you are trying to push but I do admire your efforts. Keep at it hey bloke!

  4. Goldstandard1MEMBER

    12th
    That’s solid for a busy guy like me. Usually need to scroll for 5 minutes to get the bottom.

    • Biden said on twitter that he wasn’t going to tweet all the time like Trump if he got in …. he’s got my vote already if I could vote

        • yes I got it all good, I just hope they televise as much of the show as possible, Trump will love that real life tv of a president – awesome, Part 1 Trump and the Trade deal, Part 2 Trump and the best stock market eva and 3 the finale the election against the toughest candidate ever – Sleepy Joe. Trump will not like to lose that one, can’t wait to see what more shennanigans he pulls out to win. So pitting Biden against god is a great start. What next?

          • At this rate Trump will declare himself the second coming whilst Biden be deemed transcendent as he soils his depends in a media video event …

  5. Large ammonium nitrate stores in Australia

    2,700 tonnes of ammonium nitrate exploded, destroying vast areas of Beirut. As much as four times that amount is stored in a facility near Newcastle, Australia

    https://www.telegraph.co.uk/news/2020/08/06/large-ammonium-nitrate-stores-australia-cause-localresidents/

    In 2013, the South Australian Government made a deal with fertiliser manufacturer Incitec Pivot to move its plant away from the heart of Port Adelaide.

    Two years later, the ammonium nitrate had still not shifted

    • Hill Billy 55MEMBER

      I knew that moving to Queensland I’d enter a time warp, didn’t know the same applied to South Australia!

    • I know zero about this but it’s a widely used chemical so i presume there are well known safe ways of storing it.

        • Mining BoganMEMBER

          That’s doing away with productivity restricting red tape that is. That’s winning.

        • Well, maybe. Or just not letting it degrade and having sprinkler systems nearby. I don’t fkcken know. But we store sh!tloads of dangerous things In large quantities – fuel, military ordinance etc – and they go boom by accident almost never. So let’s not be completely knee jerk about it.

          • You are correct. Ammonium nitrate used to be on every Aussie farm stored next to the diesel oil for convenience, but after a massive explosion – I think it was Oklahoma – they clamped down on it very strongly.

      • ANs main use is fertiliser. It comes as white beads sort of like bean bag balls. Mix it in a 16:1 ratio with diesel (Fuel Oil) and you get a slurry call ANFO. It’s a fabulous low explosive, inexpensive, stable and great for demolitions of all kinds.

        AN when properly stored and handled is pretty hard to deflagrate. Stick it in a bare warehouse untended for 6 years in Mediterranian heat and humidity and I reckon there’s a good chance it would sweat like a [email protected] and become hypersensitive.

        Inshallah, eh? 🙂

        • Fact check…for 40 years I thought ANFO was a low explosive. It’s low powered, but technically a high explosive. Who knew?

        • I’m going back a while, but on the farm we didn’t keep it that long. We bought only enough to get the job done. We might’ve kept some for say 3 years, but it was kept sealed so it couldn’t absorb water or it’d go soggy & set & wouldn’t go though the spreader. AFAIK it needs that FO & a Det to get it going for other uses. I’m sus on the story being pushed but I’m no expert. No farmer I knew ever mentioned any dangers, whether they knew or not IDK – we had blackpowder stump guns or Geli if we needed to move something.

    • Good pick up Jacob – we should move that nitrate from Newcastle to Melbourne. Could improve things a lot down there ….

    • Can’t carry toothpaste on carry on, but few thousand tonnes of ammonium nitrate in a warehouse near a densely populated area, no worries mate.

  6. nope so far so good, must have been a dodgy comment I made earlier that says it’s waiting for moderation, all good then I’m free

    • I think it happens when you say a naughty word. It has a random list of words it doesn’t like ….

  7. Mining BoganMEMBER

    Jim Rockford’s gold Firebird is one of the beigest cars ever. I didn’t remember it like that. Nice 70s guitar work in action scenes though.

  8. Noticed the NSW Government put out an immediate directive that any domestic aircraft carrying passengers departing from Victoria for any location in NSW must first land at SYD (Kingsford Smith). Getting interesting.

    • the next block series could be new homes on COVID grants. Way to go, that’ll keep property prices up. They sound clever, come back in 20 years and they’ll have turned their COVID simulus home on Russell Island into a resort, so there’s the growth we need from this lockdown – brill

    • We’ve done enough damage to our relationship with China for 2020. Even the Morrison Government have toned it down, at least for now, having met much consternation from influential sectors.

      • Yes, of course We’ve done the damage…… Do Influential Sectors represent the best for Our nation or their own pockets?

      • The china needs to pay for the damage they inflicted. Covid reparations tax on all exports to the China. A tax on all imports from the China. All the china companies operating in this country to have all assets confiscated and all non resident staff and CEO to have all personal assets confiscated then deported. A ban on all the China nationals coming to this country until full reparations have been paid. This needs to include a payment of 50 million dollars to the family of every person who dies from Covid, paid for by the China.

        • Nuts 🤪

          Careful with suggestions like familial reparations – families will be wheeling the grandies outside quarantine hotels and food halls in diverse suburbs.

        • It would be easier just to place a wealth tax on all their foreign assets. And completely justifiable.

          • Tens of thousands have died in Uk, Italy, Spain USA, etc yet none of the anti-China nonsense we see in Oz. Except that indulged in by an opportunistic election focused Team Trump re cold war rhetoric, trade silliness and goodbye TikTok and WeChat.

          • Hardly. The West is united on this. Germany has just said locking horns with China will now be a priority for the EU.
            China is about to find out where power really sits in the world.

          • China knows where the power lies. US has 6000 nuclear weapons, China 300. China has committed to non first strike. US has not. The West willingly sent manufacturing to China, cheap, reliable, keeps pesty enviros out of their own backyard confident services were the future, yes and no, as we have discovered.

            A nascent cold war is emerging under one of the more unreliable US leaderships, but then we did have Bush and weapons of mass destruction, with subsequent destruction of Iraq, the Hillary cackle, the Obama subterfuge, the wreck of Syrria, US sponsored support of the House of Saud (yeah, go figure) of the ruin of Yemen and anyone else the bonecutters care to destroy, excellent customers of US weaponry.

            But yeah, China.

          • We also had 75 years of no world wars thanks to a global order held together by the US even when its front man could be ridiculed.

          • MAD has ensured no global war. US has had a hand almost every other conflict, regime overthrow, minor State disagreement ever since.

          • In fact buyer of last resort policy has ensured no second great depression which would have lead to another global conflict.
            Then China comes along takes advantage depresses global demand by refusing to play by the rules, breaks promises, doesn’t re-orient capacity towards its own consumer market, then creates a second global depression, thinks it can rescue itself (again) through current account surpluses and at the same time thinks it can take away whats left of Hong Kong’s autonomy. That tells me they have no idea where power really lies.

          • Xo blabbers on. Mentions nothing about who really controls usa and why they spent their treasure on Middle East wars. Knows nothing

      • The transition of poverty stricken China to global manufacturer is extraordinary in the timeframe. To also expect a rapid transition to western style redistributive policies suggests a preference for simplicity over complexities of real world paradigms.

        • those are the rules of the game. If China doesn’t wanted to play by them they are free to leave and create another Warsaw Pact.

  9. TailorTrashMEMBER

    “Another student who declined to reveal his name said that if the university had indeed realized its mistake, it would have apologized and taken down the article at the same time as removing the tweet. “Maybe they are just afraid they will lose their appeal to Chinese students, but they should know that this incident has sharpened our eyes.”

    Pity strayans don’t have sharper eyes …poor fools …

    https://www.globaltimes.cn/content/1196895.shtml

    • The fact this is happening, not to mention UQ tells me Morrison is full of sh1t with his tough on China rhetoric.

  10. haroldusMEMBER

    Drifts in slightly, wobbles a bit then seams out.

    Stokes looked like he had it covered.

    https://twitter.com/ESPNcricinfo/status/1291409501522923520

    Edit: Hang on, it looks like it drifts out from the initial trajectory, after watching it a couple of times.

    It denies the initial physics of the ball.

    Awesome!

    Edit 2: Yes I think that’s it. Looking at it out of the hand it looks like it’s going down, but ends up brushing the top of off!

    • haroldusMEMBER

      That’s how freakishly skilled these guys are, both bat and ball.

      This is a tolerance of less than 5cm, from a length of 22y at 140km.

        • CA is deemed a charity for tax benefits and is meant to be for the benefit of Australians. They should never have been allowed to put the cricket behind a paywall.

          • Mining BoganMEMBER

            I never knew that.

            Geez, is there anything in this country that isn’t a rort?

      • And it pinched short if a length and Stokes is forward and, from the angle behind the bowler, I can’t see the stumps. It’s a stunning delivery.

    • He bowls it with an inswing action (so away from the left hander). Add a bit of angle on delivery and some seam so it nicks the top of off stump and you have a bowl that will dismiss just about every left hander who ever lived.

      • haroldusMEMBER

        I should say for all our non-nerd friends.

        Looking from behind the bowler’s arm:

        The ball looks like it is going to the left when it comes out of the bowler’s hand, so it looks like it will hit the batsman’s pads or go even further on the left hand side.

        Therefore no threat at all to the batsman in the millisecond when Stokes first sees it.

        BUT the ball bananas in the air back to the right. So more towards the middle or right of the stumps.

        Further more BUT, the ball bounces off the seam to the right and hits the top of the right hand stump.

        A place in which that ball had no business being!

    • Stokes’ face. He just walks away like a man who has had his entire belief system and perception of reality ripped away.

  11. Next thing Dan Andrews should do is ankle bracelets for people told to isolate. They’ve got the technology and powers and it’s worked in other countries and libertarians will hate it.

    • Yeah, seeing Tim Wilson and Tim Smith’s heads explode at the prospect would be totally worth it.

    • Next thing Dan should do is fine them $20k and have Scomo deport the first 20 visa holders they find not at home isolating and permanently revoke their and their family’s visas. You want compliance? Make the cost too high to risk.

        • absolutely crazy. if it was Trump, it would have been classed as the end of democracy as we know it. i hate Trump, he’s as dumb as a hippo and just as dangerous…but the Democrats manage to be even more disgusting being such opportunistic hypocrites.

          • I disagree. Trump is desperate for the debates because he is drowning in his incompetence and needs to change focus. He argues well because he makes no reference whatsoever to facts and just presents his positive thinking.
            Biden really does not want to get between the American people and their view of Trump failing at every turn. He needs the election to be a referendum on Trump and his failures.
            Trump will literally anything to try to distract voters from himself. Accusing Biden, a life long and faithful Catholic, of being hateful to the Bible and God is just a measure of his desperation. Yes 4 in 10 Americans are probably ignorant enough to believe Trump on that but they would have voted for him anyway.

        • I don’t like Trump much, but I also can’t stand Biden. He offers nothing much at this point. It’s a shame we never got Bernie.

          • I really like Tulsi but according to Hillary, CNN and McCain’s daughter she is Russian asset.

          • If I was in the US I would vote for anyone else except Biden or Trump. But I still don’t know Biden enough to know if he would actually be an improvment over Trump. I can’t help but think Biden is mentally compromised or just under pressure? But it seems not all dogs are barking. Might be better than Trump still, but I wonder if he would easily be manipulated?

            Either way I just wonder how is it that this is the choices they have in the US? Crazy.

          • After 4 years of Trump the US is going to need a steady hand just restoring good government. And with a still deeply polarised electorate that believes when told truth is falsehood and lies are truth … I am not sure how much any one Presidential term can do. But the first step is to cut out the cancer that is Trump in November, and do it decisively.

    • Ronin8317MEMBER

      Biden’s problem is he will sometime forget the script and utter the truth. The black votes is 90% Democrat.

    • Mate … sourcing rt.com? I don’t think we can rely on the Kremlin for truth …. about as much as Pravda could be relied on back in the days of the USSR.
      I have every confidence that rt.com will be looking to supply as much misinformation as it can to support their candidate Trump, who has done such a wonderful job for them in the last 4 years, that another 4 years would see America even more diminished. And I am sure that Beijing will support Trump also for much the same reasons.

      • One needs to learn how to read between lines. Reading BBC or CNN or any western MSM is reading CIA or some other propaganda. I picked RT link but many other media reported same and the video clip is genuine – he did say that. You can chose to think he did not because RT reported it or you can accept on this occasion RT just reported a fact.
        Funny most of pro Biden MSM chose to not notice what he said and are not reporting it but if Trump said same they would have been pressing him for months.. all the way to the elections reminding all black voters what Trump said.
        RT has their own agenda I know that but if I don’t read the other side’s story then I am not really trying to understand what is really going on around the world.

  12. UNITED STATES: YOUTH UNEMPLOYMENT … ANY LESSONS FROM NEW ZEALAND …

    39% Of Younger Millennials (in America) Return Home Amid Crushing Recession … Zerohedge

    https://www.zerohedge.com/markets/39-younger-millennials-say-covid-19-recession-has-them-moving-back-home

    The virus-induced recession has abruptly upended younger millennials (ages 24 to 29) from living on their own, have now moved back home, according to a new survey.
    The new survey, commissioned by TD Ameritrade (seen by CNBC), found that out of the 2,000 young millennials surveyed, about 39% are in the process or have already moved back home because of the crushing economic downturn. … read more via hyperlink above …
    .
    .
    New Zealand with its policy of covid – 19 ‘elimination’ and negligible infections, has an economy that is functioning normally (other than international travel).

    Residential housing construction is well ahead of other countries within the Anglosphere … when expressed appropriately on a ‘consents / approval rate per 1000 population per annum’ basis.

    Note Statistics New Zealand latest media release on this issue (with the brilliant historic trends graph) … illustrating New Zealand currently yoy performance at 7.6 / 1000 population (and rising) …

    Estimated number of new homes consented per 1,000 residents up in June year … Statistics New Zealand

    https://www.stats.govt.nz/news/estimated-number-of-new-homes-consented-per-1000-residents-up-in-june-year

  13. Australia is currently about 5.7 / 1000 (and falling) and the United States about 4.3 / 1000 (and rising) … way lower new housing production levels currently in New Zealand.

    No wonder the United States lead industry body, the National Association of Home Builders (NAHB) is focused on housing affordability and job creation …

    NAHB AGENDA TO ADDRESS WORKFORCE DEVELOPMENT, HOUSING AFFORDABILITY, AND MORE … BUILDERONLINE

    https://www.builderonline.com/builder-100/strategy/nahb-agenda-to-address-workforce-development-housing-affordability-and-more_o