Macro Afternoon

By in Australian Dollar, Australian Shares

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See the latest Australian dollar analysis here:

Macro Afternoon

The return of mainland Chinese and Japanese markets has resulted in a mix mood across Asia with the ASX200 hit on local COVID problem and macro Chinese problems while a somewhat bullish catchup was played out elsewhere. The USD is still firming against the majors with volatility around the Scottish elections weighing on Pound Sterling while gold is having another go at breaking out above the $1800USD per ounce level.

Meanwhile in crypto land, Bitcoin has steadied again after a mild breakout overnight at the $57K level but its still off its Monday night highs as it tries in vain to get back to the $60K level:

The Shanghai Composite has returned but its a mild session so far, up slightly going into the close at 3451 points while the Hang Seng Index made a little headway, up 0.7% to be at 28528 points. Japanese traders returned and bid up stocks strongly with the Nikkei 225 closing 1.9% higher at 29340 points while the USDJPY was basically ignored with some mild Yen selling keeping it above the 109 handle and in a bullish sideways trend:

The ASX200 took back all of its previous gains on the NSW breakout and Chinese issues with a loss of 0.4%, mainly tech stocks, closing at 7062 points while the Australian dollar took a big hit on breakdown in diplomacy but has clawed back almost all of the intrasession volatility going into the London open as medium term pressure at these weekly lows continues to build:

Eurostoxx and S&P futures are barely moving with the four hourly chart of the S&P500 showing price seemingly anchored here below the 4190 point level as resistance continues to build and momentum readings are still pointing negative:

The economic calendar includes the latest BOE interest rate meeting and US initial jobless weekly claims.

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Comments

    • JasonMEMBER

      I reckon it will get reduced on appeal but either way, he’s going to be behind bars for a while.

    • Mining BoganMEMBER

      He’s Hillsong. They’ll look after his money while he’s away.

  3. peter stanislas

    God, that aud movement today just highlights the infantile nature of traders. I’m so sick of this.

  4. migtronixMEMBER

    Somebody once told me the world is gonna warm
    I ain’t the steepest carbon use
    In the graph
    Hey now, you’re Al Gore
    And own too many homes

  5. Ritualised FormsMEMBER

    I had an afternoon rant to someone telegramming me with the following link

    China Halts Australia Economic Dialogue in New Retaliation
    https://www.bloomberg.com/news/articles/2021-05-06/china-suspends-economic-dialogue-with-australia-amid-tensions?srnd=premium-asia

    Economic cold war is certainty. Australia is at the pointy end at the moment because of its own stupidity, but i suspect the US and Europe will look to regrow their manufacturing and supply chain sectors (those facing ‘their’ deman) and that will provide ongoing economic tension for some time to come.

    Most of the OECD needs to explains to their own populations the need to move into ‘services’ (as exhorted for a generation) when the only real prosperity has revolved around money laundering, financial speculation, tax avoidance or population ponzinomics, fuelled mainly by debt being spewed out of the banking system, which has now cemented the competitive position of most of the OECD.

    There will be more Trumps (at least) unless the neoLiberal consensus can drag whole populations out of this policy made morass.

    They will not like it but they will spend like Biden and like Johnston, and they will fence off the demand thus created to create ‘jobs’ sufficient to allow punters the prospect of servicing that debt.

    And the only way to do that will be to ensure that their creation in the years since the 1980s – a weird Frankenstein of a political beast combining ‘free market capitalism’ (whatever the fuck that does mean) and a centralised autocratic state (the only type the Chinese have ever known), which only wants to do what all capitalist states do (make money and give it mostest to the elites) but is acutely aware it will never be like the states which have helped spawn it (with whole populations reading a pawned press thinking that debt serfdom is fairly normal) and is acutely aware that it will never be able to make the wealth to bring its billions to anything remotely like the quality of life they see, and aspire to, on their screens, and will therefor default to the same arbitrary autocracy which is also in its DNA – is sacrificed so that their grip on the world is never seriously questioned.

    If need be they will toss their own serfs on the fires of war, knowing that their Frankenstein will be able to do nothing less, and assume that their world will recognise that if they cant have their power to exploit then their world will be trashed for whoever takes control when they are gone, and that should they prevail then the carcass of their creation will be theirs to exploit anew……

    They are my thoughts as i drop my kid off for soccer training this eve.

    • NikoMEMBER

      they can’t do it without a reset that will involve some kind of currency debasing. There is simply too much debt in the system. But will happen as there is nothing else that can be done.
      Can we push med house price in Syd Southwest to $1.5m? No one can repay the interest let alone the principal.
      Gold will be money again.

      • SweeperMEMBER

        Why does paying the principal matter anymore though?
        If the CB is pinning down interest rates and is committed to do that for 3 years for example as per the RBA, why not just call a loan repayment moratorium for 3 years.
        Because the credit quality will be the same at the end of the three year period – in terms of both collateral and serviceability.

        I’ve made this point before. When interest rates are pinned down at zero and the government is holding down long term rates, paying principal loses its purpose. In theory you could just arrange balloon payments at the end of the loan or convert to perpetuities.
        It becomes exactly the same as sovereign debt – a stable ponzi scheme.
        Because the CB is holding interest rates below the nominal growth rate.

        • NikoMEMBER

          currencies will fall against gold when/if they do that. No matter what it’s done it will lead to creditors (some) being shafted.
          I did not say principal has to be repaid but as prices keep going up and wages stagnate people won’t be able to even repay interest.

          • SweeperMEMBER

            if interest rates are pinned down loans effectively become finance leases.. Creditors just become lessors. As long as they get their lease payments why would they care?

          • SweeperMEMBER

            In terms of interest they can still make interest rates negative to solve that problem.
            In other words there are lots of options.

    • nyleta

      The US still haven’t twigged that they need a war-time like effort over an extended period of time to get back their former position……..Mr Biden’s various plans are about a tenth of any rational starting bid, let alone what will be needed to continue the effort. Here is the Chinese effort in just one industry……..note the urgency here, which is totally lacking so far in the US

      https://asia.nikkei.com/Spotlight/The-Big-Story/US-China-tech-war-Beijing-s-secret-chipmaking-champions

        • Arthur Schopenhauer

          Quite a way. But they are pouring many billions into building the capacity.

          TSMC is building five new fabs (5!) in the US, at somewhere between 10 ~ 20 billion a pop.

    • Arthur Schopenhauer

      What sort of infantile Prime Minister would offer the country as a venue for a Super Power proxy war?
      Our kind of PM. Jeez.

      Strategically blind. Tactically nasty. Economically idiotic.

  6. MathiasMEMBER

    Philippines protests `blocking’ of its patrol ships by China:
    https://abcnews.go.com/International/wireStory/philippines-protests-blocking-patrol-ships-china-77457836

    Australian shipbuilder Austal nears deal on strategic Philippines port while scrapping its China operations:
    https://www.abc.net.au/news/2021-05-06/austal-nears-deal-strategic-philippines-port-china-operations/100115672

    Is Australia building Warships for Philipines?

    Who is AUSTAL? Watch there Advertisement.
    https://www.youtube.com/watch?v=RaWZtBIl4WY

  8. Hugh PavletichMEMBER

    New Zealand and Australia: Significant lifts in March 2021 new dwelling consents / approvals …

    Home-building hits high gear with a record number of consents issued in the last year … Miriam Bell … Stuff New Zealand

    https://www.stuff.co.nz/life-style/homed/real-estate/125048874/homebuilding-hits-high-gear-with-a-record-number-of-consents-issued-in-the-last-year

    https://www.stats.govt.nz/information-releases/building-consents-issued-march-2021

    … extracts …

    … Consents for 41,028 new homes were issued in the year to March 30, according to the latest Stats NZ figures.

    That number was well up on the previous record of 40,025 in the year ended February 1974. It was also up 9.1 per cent on the March 2020 year. …

    … But the new homes consented for every 1000 residents was still below the 1970s peak, although it had been rising steadily from the lows around the time of the global financial crisis, Heslop said

    Just over eight new homes were consented per 1000 residents in the year ended March, which is less than the record of 13.4 in 1973. … read more via hyperlink above …

    March 2021 New Dwelling Approvals – Australian Bureau of Statistics

    https://www.abs.gov.au/statistics/industry/building-and-construction/building-approvals-australia/latest-release
    .
    .
    … If New Zealand dwelling consenting currently (like 1973) was 13.4 units per 1000 population per annum, with its current population of 5.125,000 , the annual number of consents would be 68,675 … or 5,722 per month. …

    … Refer Statistics New Zealand consents rate history graph … starting March 1966 …

    Estimated number of new homes consented per 1,000 residents up in June year 2020 … Statistics New Zealand

    https://www.stats.govt.nz/news/estimated-number-of-new-homes-consented-per-1000-residents-up-in-june-year

    … Extrapolating both Australia (23,176 March dwelling approvals … population clock 25.772 million) and New Zealand’s March dwelling consent / approval figure (4,218) … and expressing them on an annual basis, illustrates that consented / approved for March at about 10.8 units per 1000 population per annum for Australia … New Zealand 9.9.

    … What are the consequences for New Zealand going forward ?

    • The Claw

      Surely you would want consents to be based upon the number of extra people, not the number of existing people.

  10. shawnMEMBER

    I’m going to try watch QandA tonight for the first time in ages just coz Alan Kohler is on. Wish me luck. *wraps remote in bubble wrap*

    • JasonMEMBER

      Storm v Bunnies is on. Absolute masterclass from the Storm in the first half.

      • triageMEMBER

        One positive for the wabbits is that their goal-kicker had a flawless outing, no misses whatsoever.

    • shawnMEMBER

      It’s been horrific, even down to the point when he finally got asked a question on housing it was from a white male who had to apologize for being a white male even though it was jokingly so. The chances of Kohler mentioning immigration is ZERO.

      Edit: he at least mentioned the fhb grants bid up prices at the end and got a clap

    • Ronin8317MEMBER

      You have to hand it to ScoMo : insulting China, Taiwan and HK all in one sentence!!

  12. reusachtigeMEMBER

    So is Britain about to go to war with France? Amazing how quick sh1t can unexpectedly happen. The question is of course, how can one maximise profit from this war? #warwithfrance

  13. migtronixMEMBER

    So what’s the altitude? I said it’s outta sight
    What’s with the attitude? She says it’s alright

  15. MathiasMEMBER

    The Australian Government is a System of Power trying to keep itself alive.

    One of the things Im beginning to see, is the Australian Currency is dead, Assets are dead and pretty much everything else. This makes me beg the question, ” Whats the deal with Australian Property? “.

    Australia is all about Colonialism. Colonialism is nothing more then Property. If half of Australians refuse to be part of that system, then will Australia begin shooting its own people?

    If Australias History is anything to go by, we’ve killed to protect Colonialism before.
    https://en.wikipedia.org/wiki/Genocide_of_indigenous_peoples

    We shot the Aboriginals without a care to enforce Property Law. Will Australia be prepared to shoot White Australians to protect its Colonialism? Probably.

    I cant see how this wont end badly.

    Some big choices coming for the Australian Government, I think.