Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Asian share markets have diverged with Chinese bourses (except the satellite ASX200) dropping while Japanese stocks are helped along by a much lower Yen as USD continues to strengthen against the major currencies. Gold is struggling after selling off overnight and is barely moving at the $1866USD per ounce level with traders of all sorts waiting for the upcoming FOMC meeting later this week. Meanwhile Bitcoin is consolidating here after pushing up through the $40K level making a new weekly high and taking out two of its previous important resistance levels as the bottom pickers come back in strength:

The Shanghai Composite returned from its long weekend and immediately sold off, down nearly 0.8% to 3558 points, while the Hang Seng Index is not doing much better, down 0.6% at 28659 points. Japanese stocks however are no longer in hesitation mode with a big rally on the Nikkei 225, closing 1% higher at 29470 points as the USDJPY pair remains elevated above the 110 handle after its surge yesterday, with momentum way overbought here:

Australian traders are also in a buying mood with the ASX200 closing nearly 1% higher and push well above the 7300 point level at 7392 points while the Australian dollar flat lines in response to the latest RBA minutes, barely above the 77 level and unchanged from Friday nights finish:

Eurostoxx and S&P futures are lifting steadily going in the London open with the four hourly chart of the S&P500 showing a continuation of the bull market run – now up over 40% in the last 12 months:

The economic calendar will focus squarely on the latest US retail sales print, but there’s also May industrial production numbers as we lead up to the FOMC meeting.

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  1. First?

    Hope everyone had a great long weekend. I was in the Blue Mountains and was fascinated by how VIBRANT the walkers on the Grand Canyon NPWS walk were.

    Lots of folks though, we need to build a tunnel through the mountains as that road is stuffed.

    • Narapoia451MEMBER

      That’ll cost you 2 billion if you were in Europe, or 100 billion in Australia.

      And yes, that road on a long weekend is horrendous.

        • The Swiss do engineering well.

          Every attraction at Scenic World, the funicular railway, cable car and skyway were all made there.

          • It is a shame- – you can see glimpses of the roller coaster track near the funicular. There is a youtube video of it with the reporter Frankie J Holden getting a ride before it opened … but it never did as the nanny state deemed it unsafe!!

      • boomengineeringMEMBER

        Arr stuff it, was harbour but just got asked minutes ago to go to Riverstone but worked the whole WE and still on a job so make that any bridge.
        Works for Ermo, not working out of his area.

      • ErmingtonPlumbingMEMBER

        I dont like going south of the Ryde or Silverwater bridge.
        East of Gladesville bridge or West of the weir in Parramatta Park.
        As for going North of Ermo I like to keep it on my side of Castle Hill and Pennant hills.
        Doesn’t always happen but my will is becoming stronger on the matter.

  2. World’s Most Bubbly Housing Markets Flash 2008 Style Warning … Enda Curran … Bloomberg

    Real estate prices around the world are flashing the kind of bubble warnings that haven’t been seen since the run up to the 2008 financial crisis, according to Bloomberg Economics.

    New Zealand, Canada and Sweden rank as the world’s frothiest housing markets, based on the key indicators used in the Bloomberg Economics dashboard. The U.K. and the U.S. are also near the top of the risk rankings. …

    … Bloomberg Economics’ dashboard compiles five indicators to estimate a country’s ‘bubble rank,’ with a higher reading indicating greater risk of a correction. Among the indicators, price-to-rent and price-to-income ratios help assess the sustainability of price gains. House price growth measures current momentum.

    For many countries in the Organisation for Economic Co-operation and Development, the price ratios are higher than they were ahead of the 2008 financial crisis, according to the Bloomberg Economics analysis. …

    … Bloomberg Terminal readers can access the full report here: GLOBAL INSIGHT: Property Bubble Gauges Flash 2008 Level Alert … read more via hyperlink above …

    Buyers need to find extra $200k to buy a home, Real Estate Institute data shows … Susan Edmunds … Stuff NZ

    May 2021 – REINZ

    … According to the latest Ipsos Issues Monitors, not surprisingly, housing is a major concern of a staggering 60% of New Zealanders, 22% of Australians and 9% of the British …

    Ipsos NZ Issues Monitor February 2021 | Ipsos

    • That was silly and slightly amusing. But I did not learn a thing about whether covid-19 came from a lab or from the wild. Though it was impressive how he made Colbert look measured and reasonable.

      • RomulusMEMBER

        If you want hard hitting facts only try news sites open to covering this issue critically- JS is a social commentator and willing to go against the herd when he believes an issue need calling out.
        Not sure why there is such an effort to protect Daszak/Fauci.

        • Stewart has used facts in the past to get his point across wonderfully. Could he also have just been mocking the lab crowd? Was the show just having a bet each way?

          And in regard to hard hitting stuff, where is it? It’s still too opaque. That does make one suspicious about the source, yet it doesn’t help us know where it actually came from.

    • ErmingtonPlumbingMEMBER

      Seems hard to believe its not going to rip here soon.
      I mean we have dodged a bullet so far,…many of them, but the more it spreads across the Globe the less likely it seem we will be able to keep it out.
      Predictions anyone?
      What’s the sun beams telling you benich?

      • C'est de la folieMEMBER

        Well at the moment the only way in is

        Stranded Australians
        Foreign students
        Global travellers

        If it gets loose (and i tend to agree it is highly likely to at some point) I reckon there will be a stink.

        ……just imagine if it happened during an election campaign.

        • Arthur Schopenhauer

          50% of the population would still think the incumbents are doing a great job.

          • The Traveling Wilbur

            And the other 60% of the population would just take it from the RBA stats and totally at face-value.

    • C'est de la folieMEMBER

      On the Russian front almost every Russian i know is disinclined to get Sputnik which is about the only vaccine being offered (which i am told is quite similar at a technology level to AstraZeneca). I know one guy from Belarus and another in Germany who both made the trip to Moscow to get it – both say they are fine but dont know if they are Covid proof.

      I know another Muscovite who went to her family’s dacha (holiday house) last year and has never returned to Moscow. I believe a lot of Russians are trying to avoid people (not easy in Moscow).

    • ErmingtonPlumbingMEMBER

      I think Phil put it most succinctly in that thread,

      October 26, 2011 at 11:30 am
      My prediction is that 99% of predictions are wrong, and the others are only “correct” in the same sense that a stopped clock is right twice a day.

      R2M certainly got it wrong,…sounded like benich does today.

      • The Traveling Wilbur

        Not the over-a-decade long fractional reserve banking gibber-jabber?

        Banks don’t create liabilities, they accumulate assets! Huzzah!

      • Right or wrong, he used to put normal charts up to back his viewpoints…… but he was really Banana man?

    • reusachtigeMEMBER

      The biggest thing that I get from all that, beyond the fact bears are fkt up, is just how few of them are members or even active today.

    • Whatever happened to Flawse? Flawse comments re Turnbull & immigration & reasons for growth, LOL …. spot on.
      Flawse nailed a lot of the issues. Do miss the Flawsian comments.

      • boomengineeringMEMBER

        Talked to Flawse directly, he had his reasons for discontinuing but does occasionally view site.

    • What new info has arisen to bring this back into the limelight? (I don’t have an opinion either way, I’ve just noticed this popping up again.)


        None really. Just increased politisization and finger pointing.

        In my probabilistic mind it’s 95% chance natural and 5% chance lab-leak (because both can and do happen).

        I don’t bother with the “China released it on purpose” conspiracy stuff. I mean, we know China’s dodgy on some/many levels, so why bang on about it.

        It’s like the “911 was an inside job” stuff. Would forces/power structures sacrifice US civilians as “collateral damage”? Hell yes, folks are bombed and murdered wholesale everyday in the name of freesom/strategic goals/manifest destiny ect.

        But is it the most likely explanation? No. And does knowing it tell me anything I didn’t know? (ie. That the US or China would do anything to reach strategic goals?). No.

        I mean it certainly could be good to find out where the Rona came from, for science, but it’ll take ages, if at all. I don’t even think we found a definitive source for Ebola yet right?

  3. Just watched 2 good auctions.
    SP RX-7 for $166k
    Same car in 2018 sold for $112k

    $142k for an R32 GTR. Exceptionally clean though.

    The Ferrari Dino is over $600k and still not hit reserve. If only I’d bought 1 20 years ago for $50k.. couldn’t afford that then though!

    • Know IdeaMEMBER

      While the GTR never made much of an impression on me, both the RX7 and the Dino certainly did. Unfortunately, I could not afford to own either of them in light of my penchant at the time for both: driving like I stole it; and making modifications to aid in said driving.

      Ah, yes, those were the days. Nowadays I get around in a rattling old diesel ute.

      • The Traveling Wilbur

        Even in a secondhand ute the thrill’s still there. As long as it’s not yours you’re driving I mean. 😇

    • Just as daft as Bitcoin or Nike Air Jordans. Still, it’s their money and at least they ain’t bidding up house prices.

      • Correct, at least it ain’t bidding up houses. But how much of this is financed through home equity I wonder?

        I would not be surprised if the SP RX7 is like the Phase III GTHO Falcons and hitting the $1mil mark in the next 15-20 years time.