Macro Afternoon

See the latest Australian dollar analysis here:

Australian dollar pops and drops on Evergrande vs Fed

Stocks have surged across Asia despite the somewhat surprising undershoot in Friday night’s US unemployment print, with a lower USD and flat US stock futures not hindering action either. Risk currencies have pulled back slightly from their recent booming ascent, including gold which surged up towards the $1830USD per ounce level, but all the action is in Bitcoin as it gapped higher after basing and then breaking out on Friday night:

The Shanghai Composite is having a great start to the week, up over 1% to burst back above the 3600 point level while the Hang Seng Index is up nearly 0.9% to get back its own 26000 point level which had been slowly turning into resistance.  Japanese stocks continued their epic breakout, with the Nikkei 225 finishing another 1.8% higher to 29659 points:

Australian stocks were the odd ones out but at least they didn’t lose ground with the ASX200 closing dead flat at 7528 points while the Australian dollar has pulled back slightly from its Friday night surge, having settled at the 74.40 level after being extremely overextended:

Eurostoxx and S&P futures are slowly building going into the London open, with the four hourly chart of the S&P500 showing price wanting to re-engage back above the 4540 point level after a scratch session on Friday night:

The economic calendar is relatively quiet as always following the US employment print with the usual Treasury auctions and not much else.

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Comments

  1. Hugh PavletichMEMBER

    China …

    China’s Vice Premier Liu Reassures Businesses Amid Crackdowns … Bloomberg

    https://www.bloomberg.com/news/articles/2021-09-06/china-s-vice-premier-liu-reassures-businesses-amid-crackdowns?srnd=premium-asia

    China’s Vice Premier Liu He made a strong pledge to continue supporting private businesses after a spate of regulatory crackdowns in sectors from after-school tutoring to Internet platforms rocked financial markets.

    “The principles and policies for supporting the development of the private economy have not changed,” Liu, who is President Xi Jinping’s top economic adviser, said in a video speech to a digital economy expo in Hebei province, according to a Xinhua News Agency report. “They don’t change now, and will not change in the future.”

    China must stick to socialist market economy reforms and persist in opening up the economy, Liu said, vowing the country will protect property rights and intellectual property rights. He reiterated that the private economy has contributed to over half of China’s tax revenue, more than 60% of economic growth and 80% of urban jobs. … read more via hyperlink above …

    China’s property bubble may be about to burst, and it could cost Australia dearly … ANALYSIS Ian Verrander … Australian Broadcasting Corporation

    https://www.abc.net.au/news/2021-09-06/china-property-bubble-may-be-about-to-burst-hurting-australia/100435868

    Making Sense of Xi’s New Common Prosperity Doctrine … Anjani Trivedi … Bloomberg

    https://www.bloomberg.com/opinion/articles/2021-09-05/making-sense-of-xi-s-common-prosperity-doctrine-for-china-s-investors

    … important recent article …

    China’s ‘Volcker moment’ is a mounting risk to the global recovery … OPINION Ambrose Evans – Pritchard … UK Telegraph
    … h/t PM …

    https://www.telegraph.co.uk/business/2021/09/01/chinas-volcker-moment-mounting-risk-global-recovery/?WT.mc_id=e_DM1485705&WT.tsrc=email&etype=Edi_Edi_New_Reg&utmsource=email&utm_medium=Edi_Edi_New_Reg20210902&utm_campaign=DM1485705

    Trouble at the country’s developers, sitting on $5.1 trillion debt, could derail the world economy …

    … Home building and property make up 17pc of Chinese GDP, including furniture and appliances. The sector also generates 44pc of local government revenues through land sales and fees, injecting $1.3 trillion a year into the economy as quasi-fiscal spending.

    All told, property makes up a quarter of the Chinese economy, three times the relative weighting of America’s extreme bubble in 2007.

    Xi Jinping’s assault on property should not be confused with the stop-go cycles of the last quarter century, a form of Keynesian fine-tuning with “Chinese characteristics” that has each time prevented economic slowdowns from going too far – at the cost of worsening debt ratios.

    “This time is different. It is China’s Volcker moment,” says Ting. The term refers to the drastic monetary tightening of the US Federal Reserve under Paul Volcker, who raised interest rates to 19pc in 1981 to halt the destructive wage-price spiral of the Great Inflation – setting off the Latin American debt crisis as collateral damage. …

    … The Party has concluded that the house price spiral is triply corrosive: it is a financial black hole; it is the chief cause of cancerous inequality; and it is a strategic threat through the demographic channel. …

    … The other catalytic shock has been this year’s census, revealing that the country is ageing even faster than feared. The fertility has kept falling to 1.3pc despite the end of the one-child policy, now the three-child policy. … read more via hyperlink above …

    • Mining BoganMEMBER

      They should use it for foreign student quarantine when the borders open. Whack a slave or two in each pod, give ’em a bucket to sh!t in…they’d be used to that…and off they go. Just chuck some food and water in occasionally when they’re at the bottom and it’s all sweet.

  2. MINI-LESSON 9: Evidence Based Science & Mistakes in Particularizing the General (Simplified)

    N N Taleb’s Probability Moocs

    1) The law of large numbers (properties of aggregates) works in one direction. Why you can generalize from particulars, never particularize from generals.
    2) The difference between clinical, statistical, and risk management approached. Why they don’t scale.
    3) Never compare Mediocristan to Extremistan (Covid to car accidents).

    https://www.youtube.com/watch?v=FIc5p79CxDk

  3. Hi Kerry, it’s Clotty.
    Clotty. Yes, him.
    CAn I get a prime ministerial exemption to go lay hands on Jen then head back to canberra?
    Stops?
    Yes just Maccas probably in engadine.
    What?
    Yes, that Maccas.
    Yes?
    Sweet as!

  4. The Traveling Wilbur

    Well, 30 hours post jab time and feeling just fine and dandy and full work day nearly done.

    I put it down to my peak level of fitness and my body’s natural ability to manage my immune system so well. And my constant sobriety.

    But really, feeling great, arm not so sore, and somewhat less importantly, not at all dead.

    • SnappedUpSavvyMEMBER

      Constant sobriety 😜
      Let me know when you start a conversation with bill oddie in a string shirt

    • The Travelling Phantom

      Oh! That means your body is used to covid in any form..maybe you had it and been asymptomatic

    • I’m booked in to get the Holden Astra vaccine Wednesday at midday, wondering how I’ll react. I’m usually pretty healthy and fit and don’t get too sick too often. So will be interested to see how Covid impacts me. I plan to drink a lot of water to stay very hydrated.

    • It’s been a great series. Two teams that are wildly inconsistent trying to get on top of each other. The best thing is that if India win it means England have lost and if England win India have lost. What’s not to love?

    • JohnR – when he talks about the value differences between the regular SC 911 and the 2.7RS. It makes me want an R34 GTR. Mostly because I could afford the R32/R33 GTRs if I really wanted 1, but long term I think R34 GTRs will remain so valued they will make the best investment.

      • “Gavin…I think I’m pregnant. I think it’s yours”
        @Gav “That just makes me want an R34 even more!”

  5. I called my Dad to say G’day on Fathers Day, and he growled at me about not being vaxxed. Said the bug would kill me I’m a flash if I got it, so I thought I’d check the data.

    Here’s the latest Australian Covid death data by age and sex.

    https://www.health.gov.au/resources/covid-19-deaths-by-age-group-and-sex

    For my cohort of men aged 50-59, there have been 13 deaths. I’d be willing to bet the majority of those were fatties, diabetics or had similar comorbidities.