Macro Afternoon

See the latest Australian dollar analysis here:

Macro Morning

A sea of red across stock markets here in Asia in response to a much lower than expected Chinese manufacturing PMI, coupled with some large trading holidays for Japanese and Chinese markets has left a lot of risk off the table. Bitcoin is trying to find a bottom here this afternoon after slipping below the $53K level overnight, currently just above the $54K but not yet showing signs o a breakout:

Chinese markets are seeing some strong selling post the PMI print with the Shanghai Composite currently down 0.5% to 3457 points while the Hang Seng Index is taking back all its recent gains and then some, down 1.5% higher to 28856, again rejecting resistance at the 29000 point level. With Japanese markets closed, trading in the USDJPY pair was also muted with a very small pullback below the 109 handle again:

The ASX200 was hit with a near 1% loss going into the close, down to 7018 points, while the Australian dollar continues to reject overhead resistance at the 78 handle as it swings along a tight trading range here, basically finishing the week where it started:

Eurostoxx and S&P futures are pulling back but not as much as Asian shares going into the London open, with the four hourly chart of the S&P500 showing price really wanting to get into the stratosphere and make another new record high, but momentum is waning here with some wide ranges overnight possibly pointing to more downside volatility ahead:

The economic calendar finishes the week with a bang, namely German and EZ wide flash GDP results for the first quarter, followed by the US core PCE measure and the Chicago consumer sentiment print.

Have a good weekend and stay safe!

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Comments

  1. Bidens nuts… Spendthrift Biden is risking economic disaster https://www.telegraph.co.uk/business/2021/04/30/spendthrift-biden-risking-economic-disaster/ On top of the near $2 trillion coronavirus recovery stimulus comes a further $1.8 trillion of social safety net spending and $2.3 trillion in planned physical infrastructure renewal and environmental investment. Combined with previous pandemic-related packages, we are talking about additional spending totalling more than a quarter of annual US GDP. Nothing like it has been seen in peacetime before.

    Anyone who thinks there will be a market correction anytime soon, has to prove their is a world war or a comet coming…

    And the worst part about all this stimulus, its not actually building anything but roads. Re-eductaion is an euphemism for free money!

    • Dominic Green crushes it (https://www.telegraph.co.uk/news/2021/04/29/joe-biden-wont-get-away-great-leap-backwards/) – Biden won’t allow the government to negotiate prescription drug prices, which are disgracefully high. And he won’t alter eligibility for Medicare or expand Medicare benefits, both of which would move the US closer to an NHS-style “single-payer” system. So Obamacare will stagger on, healthcare will continue to be the monopoly of private corporations, and Big Pharma and the private insurers will continue to define healthcare policy.

      What a disaster, this is a country that spends close to 20% of its GDP (highest in the world with terrible outcomes for the poorest 20% – which lets not forget, is >66m people!) on health care, as opposed to 11% for Oz, and all he can do is play identity politics. Reforming healthcare would be the greatest economic challenge and benefit the US could undertake, and the one thing that could balance (probably into surplus) its budget, without a single cut. But, no…

      • happy valleyMEMBER

        You’d better not let our private health funds hear how much more they and the medical industry could be stitching us up for. Mark Fitzgibbon of NIB has been on a jihad for years to have more of healthcare go private.

        • We all need a safety net – and all the Tertiary hospitals in Oz are public. According to a friend of mine who lived in the US, its full of smaller hospitals, single rooms, a doctor for a small number of patients. Private investment into something that should be a public utility. With dire economic consequences.

          According to Biden, “the biggest problem in the US is racism“, um, No, Its not! And watch out for China, its about to eat your lunch. And crush us in the interim…

      • A. Obama care is actually Heritage care.

        B. Most of the Hospitals in the U.S. are owned by private equity, so health is low on the list of priorities.

      • Not too long ago, the aspiration was, whoever dies with the most toys wins.

        This will be revised to, whoever dies with the most debt, without paying it back, wins.

        • Jumping jack flash

          There aint no free lunch but as long as the expected amount of interest is paid I’m sure the banks can sacrifice a bit of debt to the gods of inflation.

        • The future does not pay back the past with stuff … and sovereign currency is just a reflection of the potential of a nations resources.

          The issue regardless of hard or soft currency is its distribution vectors, velocity, and activity E.g. socially productive or aggregating financial dealings – sans the aforementioned.

          So if your going to have a wobbly you might ignore the money aspect and focus on what its being used for and why – as it proceeds everything else regardless of soft or hard status.

      • The top 1 % (IPA, etc) have worked out after the Jobkeeper saga, that as long as they get to keep most of the publically borrowed money, debt-free, all is good.

        The much higher public debt will provide a much stronger argument for when they can run the austerity argument again that the plebs have to carry the can.

    • Jumping jack flash

      Yes, crazy like a fox!

      It seems that he, or at least his advisors, know what’s going on, and what must be done to fix it.

      “And the worst part about all this stimulus, its not actually building anything but roads”

      Well at least its a fairly useless undertaking, it’d be better if it was just spent on consumption, but i suppose they need to justify it somewhat.

    • drsmithyMEMBER

      On top of the near $2 trillion coronavirus recovery stimulus comes a further $1.8 trillion of social safety net spending and $2.3 trillion in planned physical infrastructure renewal and environmental investment. Combined with previous pandemic-related packages, we are talking about additional spending totalling more than a quarter of annual US GDP. Nothing like it has been seen in peacetime before.

      It’s $2T is over eight years. The ~$2T already spent on Coronavirus stimulus was spent in one year.

      And the worst part about all this stimulus, its not actually building anything but roads. Re-eductaion is an euphemism for free money!

      According to these, only $115 million of the $2 trillion (about 5%) is targeted at road infrastructure.
      https://www.nytimes.com/2021/03/31/business/economy/biden-infrastructure-plan.html
      https://www.forbes.com/sites/sarahhansen/2021/03/31/heres-whats-in-bidens-2-trillion-infrastructure-plan/?sh=470b5a98d473

        • bolstroodMEMBER

          Hey Swampy, how do you unsubscribe to MB ?
          I cannot find any “Unsubscribe ” facility in the MB Accounts, nor can I get a response from MB
          Use my private email to repond please, I no longer get responses to my comments.
          Cheers

      • Looking behind the rhetoric of Biden’s $2.3Tn stimulus package (over a 15-year period!!!), deducting amounts allocated toward manufacturing, semiconductors, job creation, research and utilities, which require little or no commodity input. Only one trillion dollars has a physical asset development bias. In particular:
        (a) $620Bn on transportation including 20,000 miles of roadway and 10,000 new bridges;
        (i) including $174Bn dedicated toward EVs, in particular, building 500k charging stations;
        (ii) including $80Bn to clear the repair backlog and modernise rail (passenger, freight trains, and public transit), in particular, the high traffic Northeast Corridor;
        (iii) including $25Bn on airports;
        (iv) including $17Bn on ports, waterways and ferries;
        (b) $286Bn covering schools, hospitals, affordable housing, federal buildings; and
        (c) $111Bn toward replacing all lead pipes in the country.

        That is chicken feed compared with China, who spent (or should I say allocated, hey have only spent 25%) US$5Tn just on semi conductor research over a five year period!

        • Money is a form of “merit-token” that allows each child to buy a share (smaller or larger) of the available sweets at the tuck-shop.

          The teachers can increase the number of merit tokens, and relatively increase or decrees the lollies each kiddie gets, but cannot alter the overall number of lollies.

          Children can arrange debt between themselves to suit themselves. For example Freddy might have many merit awards one day and buy too many lollies to eat. So he lends 5 lollies to Johnie. Johnie promises to payback 5 lollies on a day that he has a surplus.

          Debt is a form of merit-token too. Teachers can create debt and issue the proceeds to favoured students. For example the teachers can decree that Johnie deserves enough borrowed merit tokens to buy 10 extra lollies one day, and that Freddy owes the tokens and perhaps may later pay interest or may later pay principle.

          That is certainly an interesting twist, but in no way alters the number of lollies available in the tuck-shop to be eaten on any given day.

          I think there’s something in that for all of us.

  2. New Zealand: The massive structural slump in international tourism and travel …

    Trans-Tasman fizzer? Sluggish start for Tasman bubble tourism … John Anthony and Siobhan Downes … Stuff New Zealand

    https://www.stuff.co.nz/travel/news/124969812/transtasman-fizzer-sluggish-start-for-tasman-bubble-tourism

    … extracts …

    … Daily movements across the border data tracked by Stats NZ shows that in the first nine days of the bubble, which launched on April 19, New Zealand welcomed 30,936 arrivals, with 20,796 departures over the same period. …

    … Tourism Industry Aotearoa chief executive Chris Roberts said the volume was promising but a long way below normal traffic movements. “Over the same nine days in 2019, there were 177,000 arrivals into New Zealand and 191,000 departures,” Roberts said. … read more via hyperlink above …

    • The generals make some valid points….I mean, if pockets of France turn into slums where French values are not respected, then something has to give!

      Australia ought to watch closely how this unfolds

      • They have already turned, and something will give. It’s inevitable.

        Diversity Proximity = War.

        Also, it wasn’t just a bunch of retired old farts. There was a substantial number of current French servicemen who signed up to what was basically a warning of an impending military coup.

  3. ACT Housing to evict single mother and children from home deemed unliveable five years ago
    https://www.abc.net.au/news/2021-04-30/act-housing-eviction-mother-maintenance-repair-failure/100108192

    “For a month Alex tried to live in different hotel bedrooms while still returning home to keep up the property and feed her dog.

    Unable to drive because she suffers from seizures, she was quickly spending hundreds of dollars trying to manage the children, the derelict property and her own life.”

    Well if the useless b1tch stop spending money on dogsh1t and got here finger out and went down to bunnings and got some cheap paint and scrapers and watched a bit of youtube to fix the plumbing, she wouldn’t be homeless

  4. ALK into trading halt while MAG up 12% because of nearlogy and, in my view, next big thing. Will find out on Monday (or Tuesday but I think will be Monday) if made it like a bandit or lost and arm and a leg.

  5. New Zealand and Australian housing trends update …

    … the technology enabled and covid accelerated dispersal to detached housing and the more affordable regions …

    Asking prices on Realestate.co.nz’s portal declined by $18,340 (2.1%) in April suggesting a cooling housing market nationwide with new listings similar to 2019 … Greg Ninness … Interest Co NZ

    https://www.interest.co.nz/property/110181/asking-prices-realestateconzs-portal-declined-18340-21-april-suggesting-cooling

    There are further signs of the housing market starting to cool with property website Realestate.co.nz reporting declines in average asking prices and new listings in April.

    The national average asking price for properties listed for sale on the website dropped from $863,396 in March to $845,056 in April, a decline of $18,340, or 2.1%, for the month.

    Average asking prices declined in 13 of the website’s 19 sales regions, with rises recorded for just six regions (Northland, Taranaki, Manawatu/Whanganui, Wellington, West Coast and Otago).

    The biggest decline in both dollar and percentage terms was in the central North Island, where the average asking price was down by $108,698, or 14.8%, for the month. … read more via hyperlink above …

    … and from Australia this morning …

    Bank of Mum & Dad creating “unequal housing market” … Leith van Onselen … MacroBusiness Australia

    https://www.macrobusiness.com.au/2021/05/bank-of-mum-dad-creating-unequal-housing-market/

    The hidden factor experts say proves the Aussie property boom is a lie … Tarric Brooker … News com au

    https://www.news.com.au/finance/economy/australian-economy/the-hidden-factor-experts-say-proves-the-aussie-property-boom-is-a-lie/news-story/7a1bd3f05bbd7b74c8999da42dd0c05a

    The Australian property market is skyrocketing. But experts fear there’s one factor that is masking the real truth. … read more via hyperlinks above …

    …. Housing is a major concern of 60 per cent of New Zealanders and 22 per cent of Australians …

    Ipsos NZ Issues Monitor February 2021 | Ipsos

    https://www.ipsos.com/sites/default/files/ct/news/documents/2021-03/13th_ipsos_new_zealand_issues_monitor_report.pdf

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