Macro Afternoon

See the latest Australian dollar analysis here:

Macro Morning

Markets are quite mixed in Asia today despite the strong surge on Wall Street overnight and the positive Chinese data with only Chinese equities really putting any runs on the board. The USD is selling off in response, with currency markets accelerating against the “King” with gold surging to a new weekly high after it brushes aside staunch resistance at the $1950USD per ounce level:

In mainland China, the Shanghai Composite is up nearly 0.5% to 3292 points while in Hong Kong the Hang Seng Index is continuing its bounceback, up 0.2% to 24704 points. Japanese stock markets are in retreat on the back of a much stronger Yen with the Nikkei 225 losing over 0.4% to 23454 points as the USDJPY pair looks set to breakdown to a new weekly low below the mid 105s:

The ASX200 closed with a scratch session after being higher earlier in the session, losing a handful of points to be at 5894 points while the Australian dollar has broken out on the RBA minutes, launching to a two week high and well above the 73 handle against USD:

Eurostoxx futures are mixed while S&P futures are inching slowly higher with the S&P500 four hourly chart continuing to indicate a potential bottom at the 3300 point level as the bounce continues – but still watch 3420 as the key resistance level to beat:

The economic calendar gets a bit busier tonight with French inflation and the closely watched German ZEW Survey, with US industrial production figures from August later in the session.

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Comments

  1. According to the ABS, 2.8% of the Australian population are Indian or of Indian descent. Yet while driving around Canberra yesterday I noticed signs advertising the Liberal Candidates, and there were 4 different candidates (out of 25) who appeared to be of Indian descent or origin. This is an over representation by a factor of 5.

    Maybe I’m imagining things. Or maybe, like my local Woolies, the ACT branch of the Liberal party is being slowly compromised.

  2. lost money today.. thought futures will continue to slide and sold EVN @ 5.94 only to watch it go to 6.13. My model was calling to hit 6.11. hurts..
    not a big loss but it hurts as I panicked for nothing. Should have bought another 10k at the bottom and make a killing in 2 hours.

    • I’ve been dabbling in shorting Afterpay over the last couple of day. But my rookie error today was forgetting to close out my position at 3.45 because I was on a phone call.

      So hopefully the damn thing doesn’t pop on open!

        • I haven’t put a stop in but I do have alerts for that reason. In the end, the ultimate stop is the margin call!

          Happily, FatProphets just put our a report saying the BNPL sector is massively overpriced. Hopefully that means some selling on open.

          • SnappedUpSavvyMEMBER

            How do mobs like fat profits get away with letting off the short flare, as what they’re saying is always ancient history

    • Guess I shouldn’t be surprised in 2020.

      But I am convinced some migrant has blackmail material over Julian Hill. This guy has come out with some ludicrous immigration proposals in the last 6 months.

    • Mining BoganMEMBER

      That’s three-four years old? They’re expensive kit but get a good wrap. Would have been $7-7.5k brand new but you’d have to check how much he has on there is stock or his own add-ons.

      No bargains in second-hand at the moment. Bike shops keep running out of stock.

        • What MiBo said

          I’m after a cheap disc road frame (high end) and everything is $$$$$ (butttt there’s lots of cheap low use wheels so I grabbed some h plus son archetypes on white industries T11s near new 👌)

          My last mtb was an sworks epic and I’d go that route again or a Yeti or Pivot (brother in law imports them
          For the distro so can get cheap ). That looks an ok deal to me but I’ve been on tarmac and not on dirt for a while. Maybe pay through PayPal to get buyer protection in case it’s stolen
          Check bike vault first – get the serial number from the seller first

          Edit – read it again. Doubt stolen – he is too specific. From what I’ve seen on FB Bike Market of gumtree examples people put stuff up with little detail and basic stuff misspelt

          • Thanks Swampy. The seller is from your old stomping ground -Ridells Creek/New Gisborne. I don’t think he’ll shift on price which counts me out because I won’t get much use out of it. I’m really keen on another listing though and seeing if I could wrap up a deal.

          • Your memory is good! Gisborne / Hampton / Sandy. Also Manangatang.

            Happy hunting. Reckon there might some bargains come March

            I’m chasing a disc Cervelo R5/3 , sworks tarmac or a canyon

  3. Feast your eyes on the next supermegauuuuge business opportunity: Perth rental market.

    Vacancy rate drop = rental shortage = soon-to-be rental crisis!

    Complete with the expert opinion from REIWA president Damian Collins: “continuing reduction in supply was starting to look like a recipe for disaster for tenants looking for a home. […] In normal market conditions, with such a low vacancy rate and strong competition for property, rents would start to rise and investors would be attracted to the market, increasing available property. […] COVID-19 emergency period legislation, which was due to end on September 29 but has been extended to March 28, 2021.”

    The government cnuts are interfering with the market! DC again: “The sentiment in the community is you can’t kick looser rental scum tenants out anymore, you can’t put rents up”.

    “Mr Collins called the decision to extend the emergency period for all tenancies short-sighted and said it was making a difficult problem even worse.”

    So as soon as the government declares WA “open for business”, there are profits to be made.

    https://www.perthnow.com.au/community-news/western-suburbs-weekly/perth-rental-crisis-looms-as-low-rental-vacancy-rate-drops-further-c-1316404

      • I’m surprised he hasn’t emigrated and burned his passport. I would have done if I was as unhappy as he is with the situation.

        Amazing how all these whiners just hang around instead.

        • Both Lloydy & Monners were old school down to earth aussies – Can’t name any current sports folk like that (maybe Anna Mears was the last)……I remember going to a pre marathon talk and someone asked Monners about HR monitors – he said he was training with Deek once and he new Deek was hurting because his HR monitor kept beeping so he decided never to use a HR monitor and just went by feel. Around the same time you would go to events and Lloydy was selling his GU energy supplements and would stand at the stalls just like any other normal bloke having a yarn.

      • IMO that moment was peak Australia.

        I know we’ve been sliding downhill since the Hawke era, but the end of the 90s with the Olympics was the last great decade of the country and it’s been race to the bottom since.

    • I often find myself scratching around trying to work out what in blazes George is getting to……..

      but

      Another way to read the post-Olympic decline is in the head-to-head between Sydney and Melbourne. Sydney had 600,000 more people than Melbourne in 2001 (4.1 million against 3.5 million). That gap had closed to around 200,000 before the pandemic (5.3 million against 5.1 million in 2019), with Melbourne on course to become Australia’s most populous city by the middle of this decade.

      When I see paragraphs like that I just think WTF is it with these people. Bigger sure isnt better in terms of population when all it means is more people trying to hack out an intolerable existence – otherwise we would all be busting a gut to live in Lagos or Guangzhou or Dhaka or Kolkata. As a once parochial Victorian I would observe the only thing Melbourne has got closer to Sydney in over the last 20 years is providing a meaner, more stressful, more socially cannibalistic, life sapping existence for more of its people. But when all is said and done what is George saying in that piece – that Sydney somehow blew something in its staging of the 200 Olympics? Who gives a rats toss? and why has it taken 20 years for George to tee off? and why doesnt he add that maybe Melbourne blew it with the 1956 Olympics (because the who gives a rats line would be only that much more obvious?)

      For crying out loud. Why start (or stop) at Sydney blowing an Olympics? Why not look at economic policy George? Why not look at a nation, not just a city, which has so utterly blown economic policy over the course of a generation that its bequest to its own future generations is a white hot butt plug with beveled edges…..

    • Interesting . Unintended consequences all over the place. I would also like to see how much of that is being caused by returning expats and new rules on FIFOs.

      REIWA will still use it as an excuse to scream “build more” at some stage.

          • innocent bystanderMEMBER

            it’s on the up.
            why? I have no idea.
            returning expats?
            FiFos taking up residence?
            relax of lending standards?
            I ask some cash buyers why are they buying – didn’t want to leave their money in the bank.

            there are a lot of cash buyers.

            .

      • innocent bystanderMEMBER

        I’d honestly wait until after March 31 when all the support et al finishes.

        Like the way it ended in Sept?
        and I do get what you are saying, but honestly, extend & pretend goes on forever … til it doesn’t

          • innocent bystanderMEMBER

            yes me too.
            You are saying what should happen, now and in the future
            I’m just reporting what is happening. btw I have just listed a property last w/e and 2 very good offers already – so yeah, I see this as a window of opportunity to sell

    • Doesn’t surprise me, tbh. I know 8 eastern-state FIFO guys that have permanently moved to WA in the last 2 months, and that’s just within my smallish work group.

      I’ve started getting letter drops from RE agents also, and traffic in the city almost seems as busy as it was back during the mining boom. There’s definitely not the same amount of jobs available as there was during the boom though. Oil & Gas in particular is dead. So who knows how sustainable it is. I reckon once the borders open up again and we’re swamped with desperate kiwis it’s gonna be chaos.

      • That’s my concern too. How much of that is just the last gasp for RE in WA and how much is legitimate long term buyers? I can’t see unemployment getting better there in the short term.

        My wife and I want to move back west next year and we have a rather large deposit, but want to rent until it’s bit clearer picture. Which may never come lol.

        • “I can’t see unemployment getting better there in the short term.”

          But that is the nature of the thing.. people begin moving West and the housing market heats up again (tight rentals, rent increases, house sales picking up.. new houses going up left, right and centre).. it feeds itself until it burns out.

          Double the amount of housing starts… sucks in a lot of labour.
          Then with more employment, and more cash in pockets that sucks in the next lot.
          Then they all need to be fed, watered, entertained…
          ..and you get the next lot.

          I look after a few “trade to the home” clients and we’ve been renovating our house & garden, & recently purchased a new car for a family member. Everyone we’ve come into contact with has said they’ve had a great quarter, at least back to normal levels, if not their best winter quarter in a decade.

          Getting kerbing for new garden beds we’re looking at November the guy has booked up so much work..

          The iron ore boom, + people stuck at home/no overseas holidays, plus superannuation draw downs means people are spending up big in the West.

          • Sure, agree with most of that. IMO the difference this time is mining sector not as strong this around and if China start targeting iron ore, then I don’t think even Gina or Twiggy can make a difference.

            Debt levels are insane vs previous boom as well but as others have said, extend and pretend is in play. Until its not.

            We shall see.

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