Macro Afternoon


The stock selloff wasn’t as wide here in Asia, following yet another reversal on Wall Street overnight, with the ASX200 the standout, looking set to finish the week below 5900 points.  Currency markets are very flat following last night’s volatility around the ECB meeting, while gold is seemingly in retreat mode, breaking below the $1950USD per ounce level:

In mainland China, the Shanghai Composite is putting in a scratch session to be down 0.2% at 3228 points while in Hong Kong the Hang Seng Index is actually bouncing back, up 0.4% to 24419 points. Japanese stock markets were the best performers on local data and good COVID news with the Nikkei 225 rising nearly 0.6% to 23366 points while the USDJPY pair is remaining flat at the 106 handle:

The ASX200 was down nearly 1% at one point, but is recovering to be down 0.6% going into the close at 5868 points, as the Australian dollar continues to hold on a steady course of going nowhere, still stuck at the Monday morning starting point at the 72.80 level against USD:

Eurostoxx and S&P futures are mixed, with the S&P500 four hourly chart indicating another possible rollover back towards the intraweek low at the 3300 point level – we’ll have to see how many kitchen tables and desks are flipped by amateur traders tonight first:

The economic calendar is very Euro-centric tonight with German inflation and a Eurogroup meeting but there’s also US monthly inflation and an oil rig count to finish the week off.

Have a good weekend and stay safe!

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  1. Interesting take I heard this afternoon: mate was of the opinion that hard international border closures in Australia vs rest of world may be partially in place to stop multitude debt/mortgage holders from bailing overseas before it goes belly up.

    Not sure if I agree, but wouldn’t be shocked if true the way 2020 is panning out.

          • I see, I wondered cause they must be after revenue or something.
            Oh, hopefully you’ll be to get the beach!

        • Only outdoor pools. Indoor pools aren’t until late Nov at the earliest. We run an outdoor pool but or season usually starts on Nov 1. They might try and get it started earlier but I think reading between the lines money is gonna be an issue withthe council. Our outdoor pool never covers costs, though last year we lost less money thanusual. Our Indoor pool and gym facilities actually make money which is apparently highly unusual for local gov facilities

    • funny his example of don’t do is exactly what is happening in Oz , buying 7 times the average income with 10% deposit and then service the mortgage with 40 _50% of monthly income

    • But but but…..Australia is different, Interest rates, doubles every 7 years, negative gearing, worst house on the best street, got to start somewhere, cut back on the smashed avo, when I was your age, Maureen is a teacher and has used the equity in her home to accumulate an incredible 12 investment properties.

      Was speaking to an Irish colleague today and discussed with him the Celtic tiger issue in Ireland (GFC Bubble). There bubble was actually less stuffed than ours because the rental yield was around 11% with rents rising proportionally to prices. When the bubble blew they stopped building for several years which created a supply gap. The government also put in a 3.5x income to mortgage ratio to prevent exuberant lending. This meant that people had to save (shock horror) or be blessed with large incomes. Prices have recovered dramatically due to the supply gap but also because there is nothing stopping a corporation building/buying whole blocks of flats and renting out for 11% yield. I made the comment that it seems unfair that the average person has to compete against a business which does not face the same 3.5x lending restrictions. He agreed and says it has created further division between have’s and have not’s.

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