Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Asian stock markets are mixed with a lack of a co-ordinated rebound in response to the buy the dip rally on Wall Street with local shares affected by more COVID restrictions, while risk currencies remain stalled in the wake of still strong USD. Gold and silver remain dead flat while Bitcoin continues its own struggle with a mild bounce up to the $34K level:

The Shanghai Composite was unable to gain further from its previous solid session, lifting only 0.1% higher to 3562 points, while the Hang Seng Index played catch up, gaining more than 1.4% to  28705 points. Japanese stocks volatility has disappeared with a scratch session today on the Nikkei 225, closing at 28874 points as the USDJPY pair continued to lift throughout the day to now get past the previous weekly high:

Australian stocks pulled back due to further COVID restrictions with the ASX200 falling back 0.6% to 7298 points as the Australian dollar remained relatively quiet, bunching up at the mid 75 handle as momentum reverted to the mid-zone:

Eurostoxx and S&P futures are advancing again as risk expectations are getting higher again with the four hourly chart of the S&P500 showing price nearly back to the previous correction high nearer the 4250 point level. Having cleared previous resistance at the 4230 point level this could be a complete fill:

The economic calendar has a slew of manufacturing and services PMIs from both Europe and the US tonight.

Latest posts by Chris Becker (see all)

Comments

  1. The Traveling Wilbur

    So ABC NEWS is reporting there’s a plan to phase out battery hen chicken ‘coups’ across Australia by 2036. They must be yolking right, where are they going to find the RE to move all the battery chickens to? Australia’s boneless chicken ranches maybe?

    • They’re leading by example. Everyone knows that lithium battery chickens have eggscellent higher (energy) density although they do have the tendency to spontaneously combust were you to look in the least way wrong at them…

      • The Traveling Wilbur

        Think of the changeover and ongoing cost escalation – it’s probably not directly calculable yet given the end date currently proposed, but however much it is, it’s not going to be a poultry sum.

        • Whilst it has … potential, someone will likely chicken out and it will all turn into a cockamamie story half way into it.

          • The Traveling Wilbur

            Nah, I’m sure there’s a nugget of truth in the story somewhere. Otherwise there would be a journalistic fowl smell noticable from the get-go.

    • They’re Currently Alternating between vacant china student tower dog boxes, or vacant Tarneit indian dog boxes.
      They’re also Conducting feasability to demolish a park in Mossman, but there is Resistance to that. Local councillors have Reluctance to foregoing the gains, but say there’s Ample Potential options, like the old Siemans seafarers building.

  2. Mining BoganMEMBER

    Dave Sharma must have sold his CSL shares.

    https://www.smh.com.au/politics/federal/australia-likely-won-t-use-astrazeneca-after-october-except-by-request-20210623-p583n6.html

    In other news, a Greek lady in her late 70s asked me about AZ today. She wants to do the right thing but the old girl is scared. She’s especially worried about it for her husband because he’s got all sorts of medical things going on. But she’s also scared because she knew a lot of the oldies that the WuFlu took last year.

    What a mess.

    • SweeperMEMBER

      Never understood that point that Hudson makes.
      For accounting Payments for government spending are fungible.
      How do you say one payment is solely responsible for the fiscal deficit and in turn the trade deficit?

      Likewise US payments to foreigners on current account are fungible. How do you say one payment is solely responsible for current account deficit?

      Answer probably will be “if they weren’t fighting war in vietnam there would be no fiscal and trade deficit”

      But then if LBJ halved the great society program there would also have been no fiscal and trade deficit. Assuming the same level of GDP.
      And in reality GDP would have been much lower without both spending programs.
      Would the trade deficit have been lowered as Hudson thinks? Probably not because there would have been a stronger dollar policy (higher real interest rates). It is MMT style thinking where you can fix all the variables to suit whatever argument is being made at the time.

      • Don’t think the historical events brought to bare by Hudson, let alone his time working with in the sausage making afford you the space to craft whatabout arguments Sweeper. You might also read past his comment to glean a bit more in the tread, you know the agency that shapes events et al.

        • SweeperMEMBER

          Not saying he’s wrong just asking what am I missing?
          I’ve heard him make that case before and it’s never made sense to me. How do you isolate one payment from a set of accounts and saying this payment not the 99 others are responsible for the deficit?
          Appeals to authority don’t support his case.

          • There’s a reason for what you call dysfunctional railways today — and they are indeed dysfunctional.
            That reason is the World Bank. It only makes loans for projects that can earn foreign exchange to pay the U.S. engineering firms and other foreign suppliers. Hence, they are only built for exports and import trade.
            The World Bank would never lend for purely domestic rail transport, any more than it would lend local currency to modernize agriculture to become free of dependence on U.S. farm exports.

            https://www.nakedcapitalism.com/2021/06/links-6-23-2021.html#comment-3564287

            Trying to leave you clues so you can arrive at it yourself, but I think this comment should be reconciled with your complaint below about developing countries. Additionally I thought the whole Brazil IMF loan conv we had awhile back would have helped.

  3. Boom Times Ahead

    Let’s hope it rips this time around we’ll be one step closer to dropping all these silly restrictions. Will be free to come and go from the hermit kingdom again.

      • Boom Times Ahead

        They are a hysterical nanny state like us.

        Life has been basically normal in Florida since the start of the pandemic.

        • The Traveling Wilbur

          If by that you mean old white and Yewish people dying in the tens of thousands accompanied by rampant gang violence and random killing sprees in shopping malls and carparks carried out with fully automatic weapons, then yes.

    • Sydney just looks crazy. Following Gavin and Poppy, circumstances have dictated that I need to buy. Just had an offer accepted on a place in comparatively great condition (for less than that 1.6m dump!). Was thinking that I might eventually have to get some new carpets and some more furniture, but none of this knockdown/rebuild nonsense.

        • Melbourne. Have a good savings history so only needed a 50% deposit even though the bank was willing to lend 6x income..

          Thought that was quite good, but found out last night that a friend got booted out of his rental (landlords renovating) and bought a place with cash! His bank was going to lend him 8x income, although I think he’s done something tricky with an offset account to keep some flexibility. May have to look into something like that myself although our situations are obviously different.

          • Can recommend going with an offset account set up. Cash is there if you need it. But I am disciplined enough to not have touched it yet.

      • Welcome to the joys! Congrats on the 50% deposit, that is a huge achievement in Hellbourne. I’ve now paid my 50% deposit on the carpet and it should arrive in the country in about 4 weeks time, then I can get a booking for installation. I’m hoping I’ll get to enjoy it for a fair chunk of winter as I’d like the extra insulation better quality carpet will provide. The next conundrum is do I get someone to cut into the floorboards and check under the house as recommended by the building inspector before I get the carpets put in, or not? BTW the carpet was so much cheaper than I thought it would be. It was about 50% less than my completely uneducated guess, so there can be pleasant surprises.

        I’m so glad I’ve now joined the wfh army as I need to stay at home and feed ‘the beast’ a constant supply of redgum to keep the place warm. I can’t wait for my new curtains and my next dream is double glazed windows. I really really want double glazed windows. The garden plans are firming up too 🙂

        • Thanks Poppy. Was only really after 2 things – a study, as I have been doing a lot of after-hours work from home even before the pandemic set in, and a ground floor bedroom – this is primarily for the longer term when I’m old and can’t get up and down stairs and a lot of modern designs tend to cram the bedrooms upstairs. It also gives me a guest room for family/friends to visit.

          • That’s great. I also bought with old age in mind and I’m amazed I managed that given I had an offer in within 5 hours of it being listed. Good luck with the finances. I’m enjoying having most of my mortgage money in the offset atm and it hurts to have to take money of it (even though I budgeted for a washing machine and carpet). I just tried to get my mortgage fixed for 3 years but as it’s below their minimum of 50k they were like, no can do.

      • By the way, since I held onto my NASDAQ stocks. I could basically pay down another $100k off my $139k mortgage. But right now with rates so low I don’t see the point. And that $100k is for my garage fund.

        If your Mortgage will be far below your rent. Then I would do it. I’m so glad my mortgage is less than half my old rent in Sydney. Because when crap breaks you need the money to fix it.

        • Cheers Gav. Will have to nut down the loan structure in the next few weeks, but the more I read about it, the more an offset sounds like a good idea. Am fortunate to have a fair bit of additional cash sitting around in a few bank accounts, so having that accessible while reducing the interest burden seems like the best thing to do.
          I’m guessing that repayments will come out from there, so it will be easy to keep adding it without worrying about ever going into arrears. The building inspection came through today, and it looks to be in good nick with only a few minor things that I can easily fix myself, and if things continue as well as they have been going this financial year I may be able to knock it off completely in a couple of years.

  4. SweeperMEMBER

    Goldsmith was spot on about this:
    https://m.youtube.com/watch?v=wwmOkaKh3-s

    Free trade coupled with open capital accounts to emerging markets has been a total disaster.
    Western working class has been subsidising emerging market plutocracy.
    And this was carried out by parties of the working class like Keating.

      • Yes I did. It looks good and is getting good reviews. There’s been a fair bit of promo work from the band and the director. They know that they don’t have the sales of Queen or the legend of Joy Division. They have to work to create interest. This is my favourite. It’s Edgar warning the crowd up by going through some tracks.

        https://www.youtube.com/watch?v=vtGBcvBqOJs

  5. The Travelling Phantom

    So for the smart ones there, can someone please explain to me if what DLS expecting eventuates, what dose that mean to Aussies super, house prices and everyday living expenses? Thank you and much appreciated

      • Arthur Schopenhauer

        Crikey! I am too, but as the first dose didn’t kill me, I’m going to get the second one.

        (Pointless just to get a single dose.)

    • When we first had reports of adverse reactions the medical “experts” dismissed all concerns. Said no proof. This is why you never trust the experts.

  6. FUDINTHENUDMEMBER

    Anyone got odds on a full Sydney lockdown on the coming weeks? I reckon its a dead cert.

    • Once it’s too late. The other states should shut the borders to NSW before hot spots are declared. NSW is seeing where it has been, not where it’s at.

    • I was supposed to go to the Hunter Valley tomorrow for a work event. Some of the company are in the red zones. So half of us are not going … I have decided not to go. I’m worried about Vic closing the border and the Mrs will not be impressed with the little 1 on her own to take care of.

      I think Gladys is downplaying how worried they are. It will keep getting away from them until they lock down.

      • Arthur Schopenhauer

        Watch what the other States CMOs do. (They have been on high alert since Saturday.)

        What’s the bet Gladys leaves it to long?

  7. Amazon innovations in progress …

    Amazon Fresh – Amazon.com

    https://www.amazon.com/alm/storefront?almBrandId=QW1hem9uIEZyZXNo

    Curiosity brings out the crowds at opening of Amazon’s first full-size cashierless grocery store (incl VIDEO) … Alan Boyle … Geekwire

    https://www.geekwire.com/2021/curiosity-brings-crowds-opening-amazons-first-full-size-cashierless-grocery-store/

    Amazon’s Newest & Biggest Grocery Store: Amazon Fresh Irvine … Youtube

    https://www.youtube.com/watch?v=tRmPGqnzn7o

    Amazon Is Getting Into The Autonomous Trucking Business … Bloomberg / Zerohedge

    https://www.zerohedge.com/markets/amazon-getting-autonomous-trucking-business

    • Copy earlier related MB post …

      Ukraine … Agricultural land reform … with earlier WSJ report on Russia …

      One of the Most Fertile Nations Wants to Feed the World … Volodymyr Verbyany and Agnieszka de Sousa … Bloomberg

      https://www.bloomberg.com/news/articles/2021-06-20/global-food-supply-ukraine-soviet-union-s-breadbasket-plan-to-feed-the-world

      It was nicknamed the bread basket of the Soviet Union, and now Ukraine might finally be able to start living up to its agricultural potential in an era when the world appears to need it most.

      On July 1, a new law will allow the buying and selling of farmland for the first time in two decades. The government says the advent of a functioning market means one of the most fertile places on the planet is the first step toward bigger, more efficient farming by fostering investment.

      It’s a long-awaited reform in a nation perennially dogged by corruption and political vested interests. But it has implications beyond Ukraine after global food supply was exacerbated by the coronavirus pandemic.

      The country of 40 million people is punching well below its weight on the global stage. It’s the biggest exporter of sunflower oil, the fourth-largest shipper of corn and delivers grain to nations from Morocco to Bangladesh and Indonesia. But corn yields are a third lower than in the U.S. and wheat about a quarter below the European Union. … read more via hyperlink above …

      That’s in part down to the legacy of the communist era. Buying and selling of land was prohibited in Soviet times and then banned again in 2001, a decade after Ukraine got independence, because of fears that much of it would be acquired by the super-rich and foreigners. That hampered development because farmers could only lease plots, meaning they couldn’t use them as collateral to access money for development.

      “This reform is an event of a global scale, as it is important not just for Ukraine, but for the whole world,” said Oleg Nivievskyi, an assistant professor at the Kyiv School of Economics. “While for Ukrainians, it’s additional export revenue, for the rest of the world it’s additional food.” … read more via hyperlink above …

      Ukraine’s choice: corruption or growth … Atlantic Council

      https://www.atlanticcouncil.org/blogs/ukrainealert/ukraines-choice-corruption-or-growth/

      How Authoritarians Turn Rural Areas Into Their Strongholds … Michael Albertus …The Atlantic

      https://www.theatlantic.com/ideas/archive/2021/04/how-land-reform-underpins-authoritarian-regimes/618546/

      … Important earlier The Wall Street Journal auricle … September 2018 …

      Struggling U.S. Farmers Worry About a Resurgent Russia … James Marson … Wall Street Journal

      https://www.wsj.com/articles/grain-is-our-oil-russia-is-besting-the-u-s-as-a-wheat-powerhouse-1537719747

      Russian wheat exports are booming despite a crushing price slump, as the country’s farmers finally emerge from decades of neglect … read more via hyperlink above …