Macro Afternoon

See the latest Australian dollar analysis here:

Australian dollar slammed as Bill Evans says cut, QE in October

Share markets continue to lift across Asia in response to the broad risk on moves overnight with the USD firming against the major currencies, plus Yuan despite a lower fix today by the PBOC. Gold is failing here, about to make a new intraweek low after its rout overnight, with momentum decidedly negative on the four hourly chart, now at the $1936USD per ounce level:

In mainland China, the Shanghai Composite is the odd one out, down 0.2% to be back below 3400 points while in Hong Kong the Hang Seng Index is also off, now down 0.5% to be just below 25000 points. Japanese stock markets however are doing much better with the Nikkei 225 about to close 1% higher as the USDJPY pair tries to push higher above the 106 handle:

The ASX200 is also surging higher again, up 0.7% going into the close to be at 6106 points as the Australian dollar cotnineus to deflate, now about to crack below the 73 handle and not finding much buying support here despite a lot of risk on moves elsewhere:

Eurostoxx and Wall Street futures are up slightly with the S&P500 four hourly chart indicating another move higher tonight as it extends its gains well above the 3500 point level:

The economic calendar includes German and Euro-wide services PMIs for August, plus retail sales while in MAGA Land, its weekly initial jobless claims, latest trade balance and the ISM non-manufacturing print.

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Comments

    • K recovery. The vast amount of people that save for retirement have not lost their jobs, maybe work from home. Regulation has changed and their retirement money is basically flowing into ‘passive’ index etfs which creates buying pressure for stocks without much regard for fundamentals or valuation.

      • That’s particularly detailed and cohort-specific analysis.Marshall.

        I also appreciated your comments when you were Francis etc.

  1. IPT had some serious buyers today. I guess there will be some news coming from their latest, and hope the greatest, drilling campaign. I know they are testing some super high PGE intercepts that also contain high grades of Ni, Cu, Ag and some Au.
    Insiders started buying at 2.3c few days ago and volumes kept going higher and higher culminating today. I guess news is coming tomorrow or Monday.

      • I bought 450k at 2.4c but hard to say. It is very speculative. They do have very promising ground and reported very impressive PGE and Ag grades in the past. If those shoots open up at depth then we are in for wild ride if not then will take losses.

      • FUDINTHENUDMEMBER

        Yeh I don’t understand how people miss this. Maybe because he’s a sh1te elite (6 time bankrupt) people forget he actually is one.

        • Totally get that. I’m still pissed and amazed people think a rich bloke is going to change things that’ll make him worse off. Dickheads.

  2. I signed up for a business broker mailing list a while back – just to see what businesses are for sale. Here is an email today about wonderful opportunities to buy a Gloria Jeans franchise – this mob have 54 on the books in Sydney alone!

    “Hi Anon,

    There’s never been a better time to secure a high-profile, profitable Gloria Jean’s Coffee franchise. A number of existing owners have had their retirement plans delayed by coronavirus…so they’ve reduced their asking price to encourage potential buyers.

    Whilst COVID-19 may have delayed the owners’ divestment plans, many of these coffee shops are well on the road to recovery in terms of financial performance. Don’t miss this unique chance to secure a successful business and the potential of a long term six-figure income.

    Check out the outstanding Gloria Jean’s Coffee shops available in Sydney via this link”

    https://linkbusiness.com.au/businesses-for-sale/search?locationNames=%20New%20South%20Wales&keyword=gloria&sortBy=FeaturedFirst&page=1&searchByName=True&commissionSplit=AllListings

  3. Oooh, gold and silver not happy.

    Nice bounce for gold off 1930, but, hmmmm.

    Glad I sold some more gold and silver stocks today, methinks.

    DXY still strengthening; plus, I reckon people are feeling less worried, and are finding more yield in traditional ventures –> risk on –> sell silver and gold, even though printer go BBBRRR…?

    • Nope. DXY is strengthening because the smart money has figured out the Fed does not print money and QE is deflationary. Plus funds are flying into the US and away from EMs as Trump turns the screw on China.

      • there is one caveat though – those banks accumulate lot of reserves they can spend so that is the catch. Ok deflationary for now. But people have to be aware that these banks can lend against those reserves and when (there is no if – my view) that happens then we will see massive inflation.

        • Banks can’t spend the reserves. All they can do is lend AGAINST these reserves. Right now, lending standards are at or near all-time highs in the US. The banks aren’t lending unless it’s to the wealthy.
          Check out Steven van Metre on youtube and his post “the Fed confirms QE lowers yields”

          • I am aware of that and I agree at this point of time. I am saying when US gov start spending via fiscal stimulus people will get jobs and be able to borrow. All of a sudden we’ll see lot more money in circulation.

          • Niko, most of them will be using it to pay off the loans that have been in forbearance for six months. Paying off debt destroys money in circulation

          • VanMetre is a fuckwit – saying money printing causes deflation is like saying a fever causes an infection. Money printing is a symptom of deflation – ie if there is a risk of actual deflation central banks will print like crazy to mitigate the effects (when there is so much private and government, debt deflation cannot be allowed to happen). Eventually the bank reserves will increase the supply of broad money and therefore inflation when the banks start lending against these increased reserves ( due to greed and government backstops of loans eg PPP in USA, bounce back loans in UK etc). Also broad money supply increases when Governments borrow more at ultra low rates due to QE and spend in the real economy ie fiscal. QE in 2008-9 did not cause inflation as it was to stop banks going bust ie stop bad loans > assets. Governments at the time tended towards austerity rather than fiscal spending as the problem was in the banks rather than general economy. This time round there are not so many bad loans (at least not yet) but the general economy has been rooted by COVID, so QE is mainly to allow government to do more fiscal ie inflation could take of esp if economy rebounds say when corona vaccine arrives

        • They do Niko, yes….but…unless people want to take on debt there is no lending velocity.

          IF the Fed decides (along with Congress) they can actually print money then inflation goes nuts and the only place to be is with hard assets and loads of debt you can easily service that’ll be inflated away. Remember in the US their home loans are fixed. Here they are not, the split is what 70:30 variable? So if interest rates go up then in the US the banks wear it on fixed but here? Our wildly over-exposed specufestors, IO muppets up to their ears in debt. No good outcome there. And that’s without our crashing housing market and Joshie/ScoMo screwing the country into the ground.

    • nice recovery but things can get nasty from here. I really hope few of my explorers release good results so I can cash half the shares and just wait and see while day trading.

    • I’m still long NASDAQ. At the low point it was at $40k. Now it’s just hit above $70k. Holding stocks has earned me more money this year than employment.

      I said I’d cash out at $70k. But now I have a job again I might just hold…the printers are gonna keep printing.

  4. UNITED STATES … UPDATE … PRESIDENT TRUMPS RESPONSE TO ‘LAWLESS’ CITIES …

    Trump Moves to Cut Federal Funding From Democratic Cities … Maggie Haberman and Jessee McKinley … The New York Times

    https://www.nytimes.com/2020/09/02/us/politics/trump-funding-cities.html

    Trump Orders Feds To Begin Process Of Defunding New York, Portland And Other “Lawless” Cities … Zerohedge

    https://www.zerohedge.com/markets/trump-orders-feds-begin-defunding-new-york-portland-and-other-anarchist-cities

    • TTW got cancelled. All his traces have been scrubbed from the internet and the Russians have repatriated his body before it could be autopsied.

    • darklydrawlMEMBER

      Just in time for the AFL grand final at the Gabba. Outstanding. Curious how anyone who is ‘AFL Royalty’ is allowed to cross the border seamlessly and with hassle free quick exemptions, but the plebs are all locked out have have to grovel and plead their case. Guess “we’re not all in this together” after all….

    • innocent bystanderMEMBER

      it wasn’t that bad
      I just packed my bags and went and worked overseas for 3 years.
      so this time I’ll just …
      oh, wait.

    • It is interesting but we kinda knew this with the cytokyn response too. The deaths are manageable if it doesn’t get into aged care facilities – this is what we saw in Spain, Italy, New York.

      • Its manageable if infection rates are kept down because as much as some hate reduced movement just watch fear rip through a society … look at the U.S. getting pre Rwandan.

        I mean a kid with a AR 15 looking for conflict and when he gets it claims hes defending life and liberty, but judge I feared for my life … you should have seen the angry mob of slaves revolting … thank goat for the militia.

          • I think you should go back and relearn you American history, maybe start with how Washington stole land from soldiers and work you way up to what civilian militias were for – hint nothing to do with Government.

            Oh and the tea party … something to do with profits and not taxes of themselves.

  5. desmodromicMEMBER

    Tales from the road. I crossed into Queensland from SA today. No gate in evidence but a policeman was on duty with a few cones across the road. The ‘locked gate’ appears to have been a bureaucratic deception to dissuade travellers avoiding registering and notifying authorities that they have crossed the border. The policeman mostly wanted to talk motorcycles. The landscapes are wide and grand with a tinge of green from recent rain.

      • desmodromicMEMBER

        Well it has been a bit of on adventure. Yesterday I travelled 460 km from Arkaroola to Innamincka via Mt Hopeless and the Strzelecki Track. Winds were forecast, nonetheless I decided to use the earlier good weather to do some walking around Arkaroola and see what the road delivered. I should have waited an extra day as I endured 250 km of dust storms and raised dust. My most difficult day on a motorcycle in 45 years of riding. Today was fabulous riding across Cooper Creek and Sturts Stoney Desert. The riding was challenging at times but I was enjoying the remoteness, although with a measure of trepidation when turning onto unfamiliar roads. Such as encountering 50 km of sand. Thankfully the sand was over a firm base and manageable. Deep sand is always a concern on a big (1200cc) motorcycle. No services for 430 km meant I arrived in Windorah a bit hot, thirsty and hungry. Easy day tomorrow as arrive at mates cattle property and time to catch up over a few wines, sent ahead from Vintage Cellars.

          • desmodromicMEMBER

            I’ve seen it better and worse. The region is very dry and it is starting to cut up in a few spots but probably hasn’t had the usual traffic, so overall pretty good. The worst of the dust was on the Mt Hopeless road.

    • Banana ManMEMBER

      Well i’ll be darned. You don’t say? I thought they were there to protect us and serve us? Oh. Hang on, that’s the usa

    • A lockdown should not have this ‘exercise within 5 km’ rubbish. It should be nobody leaves the house except to buy food or work : otherwise what’s the point?

    • They are probably grateful it wasn’t Vic Police’s traditional greeting of “BANGBANGBANG! FREEZE!”.

    • The opening of the piece,

      “Afraid, nervous and looking at the ground, a little girl on a scooter is stopped by Daniel Andrews’ dystopian lockdown police.”

      That’s some fair and balanced reporting.

    • These stories crack me up. These karens and family have one experience, fckn one, with the police and start having a whinge, talk about how scared their children are blah blah blah, bet these same muppets talked in false soothing tones to each other over their chardies about the NT intervention “Oh it’s terrible, but it’s for their own good, they don’t know any better….”

      • Yeah hypocrisy is very ugly. The thing is we all have it to some degree but discovering our own can be almost impossible as most of us lie to ourselves with sweet whispers of self delusion and almost no one who knows us is brave enough to point it out. I may try and figure out my hypocrisies tomorrow when I’m chookherding. Lockdown and temporary unemployment should be good something, might as well be some introspection

          • True. But a bit of introspection doesn’t hurt every now and then. I know I think I’m relatively blemish free but there are areas I can definitely improve. Because I’ve been stuck in a living with my parents rut and I’ve been focusing on improving my physical health I feel like I’ve slacked off on personal improvement/evolution (though I have gotten quite good at biting my tongue and keeping my true opinion to myself; tonight was an exception as I told mum I thought she was a fcking idiot for not taking painkillers when she should, Dad actually agreed with me on that one😊). When I accept I’m not as good as I thought I was I tend to forgive myself then focus on making changes so its not usually a super painful process.

      • 1

        Half the people here whinging about coppers going over the top on Karen will be agitating for “tough on crime” policies and had the vapours about the protests earlier in the year.

        • Will they? Really? How do you know this?
          Half the people here saying it is OK to handcuff a pregnant woman in her house when she poses no threat will be whining the cops are too tough on minority and indigenous groups.

    • my god. yesterday it was comparisons to stasi and today its the proof as police *checks notes* – talk to a girl on a scooter.

      you all have lost your mind.

  6. Hey Gav , happy father’s day (in case I forget by Sunday) hope all going well with the new family