Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Kayaking in the Cook Islands, 2019: Photo by H. Becker

A solid start to the trading week for Asian stocks, outside of Hong Kong, with the USD mixed against the majors as S&P futures start to gain.  Bitcoin has jumped again on the weekend break, now back above the $19000 level, while gold has been relatively quite and unable to make any gains so far in the opening session, currently treading water at the $1834USD per ounce level:

The Shanghai Composite is up slightly going into the close, currently up 0.3% to 3359 points while in Hong Kong the Hang Seng Index has gone the other way, down nearly 0.6% to 26361 points. Japanese stock markets are re-engaging to the upside with the Nikkei 225 up 0.4% to 26737 points while the USDJPY pair is slowly pushing to get back above both trailing ATR resistance and the  104 handle but remains weak:

The ASX200 had a solid start to the week, up 0.3% to 6660 points but still unable to make a move above the 6700 point level stick, not helped at all by a super strong Australian dollar that after a mild pause at the mid 75s is ready to breakout again:

Eurostoxx and S&P futures are lifting firmly to start the trading week on a good note with the four hourly chart of the S&P500 showing price trying to get back to the mid week support level above the recent session lows at the 3660 point level as momentum remains in negative territory:

The economic calendar has a very quiet start to the week with industrial production figures from Europe and some US Treasury auctions but not much else. Oh, and the US Presidential election – the electors vote overnight.

Latest posts by Chris Becker (see all)


  1. “Oh, and the US Presidential election – the electors vote overnight” and just imagine if some of those College Votes go against the public instruction (which, as we know, they can do, but convention dictates they shouldn’t), and some Republican votes cross-the-floor to Biden – just to stir the ‘It’s all rigged!’ pot!

    • Looks like MB and it’s herd are in for a rude awakening in the coming weeks. Can’t believe the geopolitical illiteracy here. You guys could never pick the housing market either

        • You really can’t go wrong by making Delphic pronouncements like “Something big is going to happen really soon now”. Then, when something happens, whatever it may be, you get to say I told you so.

          Personally, my prediction is that Trump will refuse to leave the White House. If he does that (I’d give it a 50% chance) then we’re in uncharted waters indeed.

          • Not really. At least not procedurally / legally. From the moment that Biden is sworn in on Inauguration Day: he becomes commander in chief of the US armed forces, the constitutional occupant of the White House and, via the executive, the secret service report through the Dept of Homeland security.

            But civically and culturally then 100% yes I agree with you. The magatards and qtards are in so deep, and the cognitive dissonance is so overwhelming, that it’s a game of Russian roulette as to what they will do.

          • I know exactly what they will do. Nothing!!! They’re completely fractured and idiotic waiting for “the plan” to come together 😂

            I keep trying to tell you lot and you don’t listen! I told you this bozo was done months ago….

    • RobotSenseiMEMBER

      The Republican Party are so F’d going forward. The moderate Republicans are now stuck between some form of “how dare you say it was a fair election” bipartisanship and desperately clinging to the crazy orange guy on the other. Good luck walking that tightrope for any aspiring politicians. They’ve screwed themselves so badly, politicians who would otherwise be electable (e.g. Nikki Haley) haven’t got a snowflake’s chance in hell.

  2. ErmingtonPlumbingMEMBER

    OK I spoke to 99 bikes today and my Norco storm 1 se isn’t arriving by the middle of December like I was told in early October when I placed my order and paid my deposit.
    Im now told it “should” be here by the end of January!

    So anyway,…I’ve ordered a Trek Marlin 7 (same price) from another supplier and have been told Ill have it next week.

    Sniff,….I was looking forward to my Norco

    The trek isn’t specced as good but its similar and it looks better and should hold its resale value more.
    I’m getting the Marigold to Radioactive Red Fade

    • SnappedUpSavvyMEMBER

      Resale on a $699 bike 😁 ok

      Sorry mistook it for a marlin 5

      Either way resale on bikes is hard work, you are better off refurbishing the frame

      • I am about to get my old specialized MTB out of the back of the garage to give to my oldest son who has outgrown his bmx. It’s an old P1 hardtail great for downhill at cootha. Got it off a mate for $400 over ten , Nealy fifteen years ago.

        The original owner , put some great air shocks on front and put some gears on it and upgraded the brakes. The frame on that thing is awesome and tuff. Original owner broke several forks and it still rides perfect.

        See if you can find someones second or third bike. Chances are some of the gear will have been handed down onto it. Just my 2c and topical as I get out the wd40

    • Bought my daughter a Marlin 18mths ago and have been super impressed. So much so we’re getting our younger son the Marlin 7 for this Christmas (fingers crossed it arrives this week after a delay from last week). All bike shops are struggling with delays atm so don’t count on the Trek being here until it is Ermo.

    • Funny – the insane demand for bikes hasn’t translated to more people actually riding (I know you’re a fanatic though, but general observations).

  3. New Zealand just got the full 120 points for the Test Championship with their series win over the Windies. They aren’t in the top two yet, however their run to Lords looks good. Of they make it they’ll likely be up against Australia or India. If they did make it their bowlers and batters would seem to be the better fit for the English conditions. It also isn’t too hard to imagine the English preparing a wicket that favours NZ against either of those two.

    There’s a lot of ifs and maybes and speculation above but where better than an economics blog to speculate.

    It looks like the final is a single test. How daft. It should be a four test series, minimum.


    Escape from the city: the regional remote-working boom … Natasha Boddy … Australian Financial Review

    … concluding …

    … A survey of 25 of Sydney’s biggest employers revealed that 96 per cent expect staff will continue working from home next year. The Australian Financial Review survey found barely any employers who plan to encourage staff back to the office full time when NSW’s public health orders lift.

    Mr Lardner said there had been an uptick in the number of Sydneysiders looking to escape the city.

    “Outside of the CBD, we were seeing very, very tight rental markets, which is an early indicator of the housing market … and what we’ve found is a significant drop in housing inventory levels in commutable lifestyle locations,” he said.

    “We found that four-bedroom house areas had a higher level of demand relative to three-bedrooms so that supports the theory these people are looking for a home office.”

    Examples of “hotspot” locations include Gosford on the NSW Central Coast, Merewether Beach in Newcastle and Wollongong.

    Mr Lardner said the appeal of lifestyle locations was that they were within a two- to three-hour drive of major cities. … read more via hyperlink above …

    • happy valleyMEMBER

      +1 Why does Stan turn everything in to it being Stan interviewing Stan about his people and himself?

      • happy valleyMEMBER

        +1 Indeed, Scotty from Marketing can make every disaster in to a positive and at the very least can teach Boris that blaming UK Labour for everything will fix everything?

        • Arthur Schopenhauer

          He just has to say, “Look, that Labor bloke has a funny name”, at every presser until the next election.

    • Boju just needs to channel his inner SFM. In times of extreme national distress, what would Scotty do ?

      Boju needs a holiday to Hawaii. Or maybe Spain, if that’s a little more relatable for the English bogans. Even if Boju is coming himself so hard that Engadine McDonalds staff get ptsd flashbacks, it’s important to project an air of calmness and ZFs in times of national crisis

  5. China has officially – and illegally – barred Australian coal . Ed Husic quickly had this to say :

    Labor frontbencher Ed Husic on Monday dismissed claims from former resources minister and Nationals Senator Matt Canavan that Australia should retaliate against Beijing’s trade strikes by putting a levy on iron ore exports.

    “China does depend a lot on our iron ore and we’ve got high quality product. So the relationship I’d say is valuable to both us,” Husic said. “What Matt Canavan is trying to do in increasing the price of our iron ore is to encourage China to look elsewhere for iron ore.”

  6. Code ErrorMEMBER

    My thoughts, for anyone interested, on the demographic profile of the public service (from a reply in another post)……..

    My observation is primarily the Commonwealth Public Service, but all the state public service have a similar phenomena in play…..

    If you look at the ‘ongoing’ component of the ATO, Services Australia and the civilian part of Defence (that is more than half the Commonwealth Public Service; ‘Ongoing’ as opposed to ‘Non-Ongoing’ [permanent as opposed to temporary]) you will see the median age is late 50s to low 60s. The number of punters who could up stumps at 54/11 months is incredibly small. And it was only those in the Public Service pre about 1991 who could do it under the old CSS super scheme.

    If you look around those core public service agencies you will see a completely different phenomena – buildings full of people looking at working into their 70s.

    This reflects the operation of the super scheme which came after the CSS – the PSS (which ran from early 1990s to circa 2005). Unlike the CSS which had an employer contribution of 5% no matter what and caused offence when compared with the schemes of the day because of its implicit encouragement to retire at 54/11, and its flat rate of employer contribution (not encouraging employees to contribute more), the PSS had employer contribution which did vary according to employee contribution, and got rid of the 54/11 phenomena.

    But the variation of the employer contribution came with a quirk. If you put in 2% then the Commonwealth set aside 2% for you – there was no ‘fund’ performance so it was all largely notional, and ‘defined benefit’ relating to the average of the last three years. At the other end of the contribution rate is the last remaining public sector gravy train – the 10% contribution rate. Under the PSS if you contribute 10% of your salary the Commonwealth effectively slaps maybe 17% in. For example an APS 5 could slap away 10% of their salary (lets call it 8k per year) and their salary ‘pot’ seems to go up by about 25k per year.

    Now if you think about those people on the PSS they are just coming to the stage where many of them have paid off houses and kids – if they are lucky – and can start thinking of retirement. If they are unlucky they will have a divorce, likely meaning they are [still] paying off another house, maybe they’ve spent a lifetime sailing close to the financial wind and not putting moolah into their PSS for one reason or another, maybe they have health issues, maybe their family has health issues etc. Many of them are highly intelligent and would be in little doubt about their potential other employment if they were to depart the Public Sector. So observably they are sucking it up and reasoning that even if what they are doing is spiritually corrupting and mindless, at least it pays the bills and contributes to their super.

    Now at this point in the discussion I would like to introduce you to the concept known to the community at large as Mr Joe Hockey. In addition to introducing the concept of ‘lifters and leaners’ into the public discourse and failing to get a budget through parliament, Joe Hockey has an even greater claim to fame for public servants. In 2014 amidst a bout of national angst about the lifting of the pension age someone fed through to Joe Hockey the idea that if the rest of the community was going to have to work longer before they could access the pension, then it was only right that public servants should too, and that therefore the old compulsory retirement provisions which had applied to the Public Service should be ditched.

    Now I have very reliable contacts who tell me that the person who made that suggestion made it half as a joke in a room full of pointy headed imbeciles from the IPA {and Joe Hockey}, along with the half thought that if public servants work longer then they may hold off on accessing their pensions that much longer, and that some of them could even predecease their access. Amidst the enthusiasm with which the idea was taken up nobody thought to consider the implications for the workforce they actually had.

    That workforce had watched on in the late 1990s and early 2000s as the public service had redunded large numbers of people, often without so much as a moments thought, in order to get people ‘off the books’ – and those redundancy rounds created a mindset of entitlement to a sort of payout at the end of the career amongst those who remained. For others, who may once have been genuinely committed to the idea of ‘public service’ but found themselves watching ideologues and bottom kissers rise to the top and serving policy they may not actually have all that much time for, just turning up and doing the job becomes in some ways an act of defiance, or getting an outcome for their families from an employment paradigm they have ceased to have that much time for.

    So many of those aged punters you can see in the public sector are faced with a circumstance. They can stay in the Public Service and maximise their PSS Super and/or wait for someone to come along and make them redundant, and they can continue doing that until such point as they run out of puff or mental acuity, and maybe even take a punt on getting another step higher (to increase that final average salary) or they can – depending on life financial stressors (and there will be plenty of them highly stressed) – stroll out the door when they can access their PSS pension (age 60). Those you see in the public service working beyond the age of 60 are plausibly in the former category. According to the data from ComSuper the average pensions paid out under CSS and PSS are in their low to mid 30 thousands (some of which is tax free)

    That may provide some sort of insight into the obduracy of some of that dead wood. A lot of it will be related to house prices (either theirs or a need to support their kids), and it may also support some of the stronger public sector Unionism rates.

    There are more thought provoking observations on public service super schemes in these pieces

    • Gunna,
      Is the cliche of a public servant being unsackable true? If so, how do they deal with those that are either not up to their job or just taking the p1ss?

      • GunnamattaMEMBER

        My experience (and I am a man who has argued the case before the old IR Commission and got results) is that Public Servants are quite sackable.

        My observation would be that all too often managements in the public sector arent interested in going through the process. You tell the punter what they are doing wrong, you give them a chance to turn it around, and shunt when they dont do it. Generally it is the telling the punter what they are doing wrong (or why/how it is wrong) that is the issue.

    • Yeah I reckon it is dead. We should be setting up hydrogen cracking plants from sea water and fuel cell production. I think that will start to take over from natural gas as well. I also think fuel cell powered cars would make current hybrid / electric cars obsolete.

      • I note the Japanese have been quietly cracking on with hydrogen powered vehicles but they don’t seem to use good PR unlike Elon Musk and other self-inflatable types. I imagine if they have a car that goes ok then the remaining issues are hydrogen storage and distribution while minimising combustibility. I imagine BP and Shell would be delighted with this outcome as it gives them a role that they are removed from if we go solar cells on roofs, home batteries and hybrid EVs. Do you know how well this is progressing?

        • I have read a small mining group (i think its a mining group) has applied to build a extensive solar far in the north of WA, for the power to crack hydrogen from sea water pumped in from the coast. Not sure how far along it is, if its even beyond the design stage. But i think scummo explored the possibility to sell the hydrogen to Japan on his recent trip there.

        • My basic understanding is that electric vehicles were always seen as a stop gap to hydrogen vehicles. Japanese automotive groups were trying to get to hydrogen. Japan’s advantage is that their major corporations are deeply entwined with the government and so can persue these things with support and over longer time frames. Their disadvantage is that they are as nimble as 200kg forward running the ball forward. Toyota stepped back from electric and are now getting back into it, but not rushing in. Suzuki is the most popular brand in India and are going to work with Toyota in rolling out EVs there. There’s also a cross company development plan for EVs. They aren’t at the bleeding edge, and they don’t blow their own horn, but they seem to be making the change.

    • GunnamattaMEMBER

      a pretty good read for mine……

      the below goes to the heart of the issue and should be memorised by schoolkids

      Since the 1980s, when the Chicago school style of economics really took hold, America has heavily focused its economic structure on one fairly simple principle: the pursuit of self-interest. The philosophy goes something like this: If everyone just looks out for themselves, and government stays out of the way, the so-called invisible hand will take care of the rest, and society will self-organize efficiently and effectively. For corporations, which we view economically as individual actors, the pursuit of self-interest, at least since the shareholder revolution in the ’80s, means maximizing shareholder profit. In fact, according to the theory, it is not just preferred that they maximize shareholder profit, but it is actually their social responsibility to do so in lieu of anything else.

      China noticed this aspect of our economic philosophy and, at some point in their dalliance with Western capitalism, the Chinese Communist Party figured out that corporations and individuals, not the government, control nearly everything in America. Natural resources, intellectual property, entertainment, culture, ideas. And when China paired that knowledge with their observation of our intense duty to individual self-interest, the hack was born: Make it profitable for individuals, institutions, organizations, or shareholders, and they will hand the keys of the American castle over to China one piece at a time without thinking twice. In fact, it will be their social responsibility to do so.

      • I would say the first country that figured it out was the Japanese, but then they also become ‘Americanized’, so the Chinese ended up hacking them as well.

      • That’s a pretty interesting argument. And the Middle Kingdom complex seems to be alive and well. Fortunately we are not facing 1939 (yet), although Australia needs to do some fairly sharp footwork for essential self-sufficiency.
        One thing George W Bush had right was that development of solar assets and EVs help with reducing oil dependence which is useful re self-sufficiency for US but also for us.
        We need to do a lot more in the near Pacific to fend off Chinese predatory aid offers, and therefore keep the Pacific in friendly hands. That certainly includes the Torres Strait!!!!

      • Make it profitable for individuals, institutions, organizations, or shareholders, and they will hand the keys of the American castle over to China one piece at a time without thinking twice. In fact, it will be their social responsibility to do so.

        Didn’t one of those Russian dudes say something along the lines of “the capitalists will fight to sell us the rope with which we shall hang them” ?

  7. Trump built an incredibly fragile coalition that was based on one thing – angry people. But there was never any leadership or follow through so these idiots stayed angry at what they started angry about and they don’t agree with each of what that should be.

    The only focal point was Trump himself after their one cry in unisome “lock her up” went nowhere.

    Now Trump is going nowhere

    • Reckon he just likes the public rally’s where he gets to stir up the crowd. He will stay in the public arena with rally after rally stoking the crowd getting donations for as long as he can to pay off his debts and make a profit. I hope the various states AG go after him and his criminal family. I doubt he realises pardons don’t include state crime. Would love to see his kids in jail

    • Disagree mildly.
      The anger and disenfranchisement was already there but Trump has made himself the focal point of all the hate and anger that we are seeing. He is reflecting it back and normalising it, and using that anger to make himself a dominating political force.
      Having done all that I absolutely expect Trump to try to stick around, and spend 4 years campaigning to his base.
      He maintained the birther lie re Obama for 5 years after it was obviously false, so I reckon he can maintain the delusion that he is undefeated, won the election and it was wrongly stolen from him by the nasty Dems/swamp creatures/Supreme Court judges for at least another 4. Especially as it is proving more profitable than any of the businesses that he ran!
      Having 70 million people prepared to vote for him after the last 4 years of stunning ineptitude was remarkable.
      I suspect Trump will try to boss Mitch McConnell around to show he’s boss as well as to encourage him (as if he needs it) to make Biden’s life as hard as possible.
      That said, to stop his movement, Trump needs to either be in jail or suffer ill health. Such things have stopped Mafia Dons in the past, of whom we are so easily reminded by the behaviour of this Don.
      The last thing we need is Joe Biden getting sick.

      • Dude. His one thing was not being a loser! He’s the first president in over a generation not to win re-election and the last guy was VP for 8 years before he was president…

      • His base will not hold with years of Trump getting chipped away at as a loser!! Especially since the boomers won’t make it

      • ErmingtonPlumbingMEMBER

        “Having 70 million people prepared to vote for him after the last 4 years of stunning ineptitude was remarkable”

        It is remarkable and like his initial election victory in 2016 an indication of just how divided and broken American “democracy” is.
        The whole process just continues to degenerat into a partisan Circus.

      • I think Americas under attack by China. There’s been a Currency War going on since 2013 and Chinas been manipulating its currency in an attempt to gain advantage over America. China keeps pumping it up which is shutting American Manufacturing down and seeing it all move to China.

        Look at this currency chart of USDCNH –

        The thing I’ve noticed is things tend to crash quickly but it takes some time for things to rise. When I see such a fast rising spike like this, it doesnt look natural to me. Thats money printing. Im no expert economist but that looks to me as if China is printing money and deliberately targeting America on purpose, destroying US jobs and sending them all to China.

        I think America has fought back a few times and China just comes in over the top again. I suspect the recent frustrations of sanctions and ships sitting in ports has to do with America firing currency back at China to protect itself. As of writing this, America is firing Currency back and the USDCNH is falling again. China Manufacturing is probably at a stand still and Chinas regulating its Money Flows. Its punishing and sanctioning Australia and I bet Chinas expanding itself elsewhere too.

        Im pretty convinced Chinas manipulating the currency and putting Americans out of work. Thats causing a lot of poverty in America and a lot of frustration. I think Trumps instincts on China are pretty spot on but the way he’s handled things has been atrocious. I think China is getting the better of him and his handling of Coronavirus basically lost him the election.

        Bitcoins took off the moment America started defending its own currency. We saw Bitcoins spike to 20,000 . In my opinion, that was China using Bitcoins to Launder money into America. Its how they are getting around the sanctions and currency. I mean, look at the time Bitcoins started to rise. It was around the same time the USDCNH started to fall.

        Chinas arrogant and they are turning America into a laughing stock. China believes they own the world and they dont even take America seriously anymore. They are stomping all over America, manipulating the currency, laundering money and stealing tech. When you threaten them with warships in the South China Sea, they just laugh. What kind of Country laughs at Warships?

        Politically, there are a lot of people who are afraid of World War 3. The understanding is World War 3 is likely to be nuclear and once we start this, even those uninvolved in the fight could die from the fallout. There is a huge effort to try and diplomatically stop a world war before it starts. Everyone is hoping China will back off. In my opinion, they havent backed off in the past, I dont think they will back off in the future and I think at some point they are going to go too far. Look at what they are doing to Australia. I dont think Diplomacy will work with China. We should at least try if it means avoiding further escalation but personally, Chinas too sneaky and I dont think Diplomacy will work. The only HOPE is Chinas Economy may collapse at some point in the future and prevent the world from a Nuclear Armageddon.

        Australians may end up having to decide between going to war or slavery. I dont think China’s going to back down. They want to conquer the world and they dont care who gets in there way.

        America and Australia could be forced into Conscription at some point in the future. If your between 18 and 45, you may not have a choice. We’ve seen all this before and Im pretty sure we all know how the rest ends.

        There are lots of Chinese in Australia. We’ve been very stupid. I dont know how we are going to handle that but I think if things go too far, it could happen very fast. Its hard to stop a war once they start.

        Indonesia seems to be getting friendly with China. That could be a problem for Australia if they decide to ally together.

        I hope China backs down but from everything I’ve seen in Chinas history, they rarely do unless they are overpowered. They just take what they want.

      • Having 70 million people prepared to vote for him after the last 4 years of stunning ineptitude was remarkable.

        A quite substantial fraction of those people would have voted for him simply because he was the Republican candidate (ie: not the Democrat one).

    • @mig – that is well reasoned and coherent. Why were you so off the rails in those videos you posted on Saturday?