Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Asian stocks have started the trading week in mixed fashion yet again, mirroring similar volatility on Wall Street and European bourses from Friday night. Japanese markets fell back slightly while Chinese shares are all over the place, with the local franchise – aka the ASX200 – having a very solid upday.ย  The USD remains relatively firm against most of the risk currencies although gold is coming back slightly, currently at the $1758USD per ounce level, with Bitcoin gapping up after weekend trader, currently just above the $44K level but still short of last weeks high:

The Shanghai Composite is down over 1% going into the close, currently at 3575 points with the Hang Seng Index going the other way, lifting more than 0.5% to 24316 points. Meanwhile Japanese markets are pulling back after an exuberant previous week, with the Nikkei 225 closing flat at 30240 points as the surging USDJPY pair remains poised here on the four hourly chart just above the mid 110 handle after a big surge last week:

Australian stocks had a solid start to the week, with the ASX200 taking back its Friday losses to finish 0.5% higher at 7384 points, but still shy of previous medium term support as the Australian dollar was relatively stable in its weekend gap move, still hovering just below the 73 handle:

Eurostoxx and S&P futures are up strongly going into the London open, the former at least 0.9% so we should see a good swing back on European stocks with the four hourly chart of the S&P500 showing price wanting to get past the previous weekly resistance high at the 4470 point level:

The economic calendar starts the week with a few big hitters out the gate, namely a speech by ECB President Lagarde and the fallout from the German elections thereof, followed by the latest US durable goods order print and a slew of speeches from Fed members and the BOE as well.

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  1. The Travelling Phantom

    Itโ€™s a grand old flag
    Itโ€™s a high flying flag
    Itโ€™s the emblem for me and for you
    Itโ€™s the emblem of the team we love
    The team of the red and the blue
    Ev’ry heart beats true
    For the red and the blue
    And we sing this song to you
    Should auld acquaintance be forgot
    Keep your eye on the red and the blue!

    • ErmingtonPlumbingMEMBER

      Iโ€™ve got a dig up tomorrow.
      A cooler day the better for an all day dig.
      I have to re-build a collapsed, 60 year old, earthenware, inspection shaft at Melrose Park.
      Iโ€™ve decided to not get a Machine or labourer as the sewer Junction is only around 1300 mm deep.
      But if I donโ€™t get it finished by the end of the day the forecast rain on Wednesday could really fk me up.
      Fingers crossed I donโ€™t get to many roots or rock.

        • ErmingtonPlumbingMEMBER

          Itโ€™s more than double that with an operator and besides Access is an issue for a machine on this one.

          You always dig around the bottom of the bend by hand anyway. Its easy for the machine to damage to Junction into the main.
          If you do that youโ€™ve got to dig triple the amount of earth out to give the Waterboard contract are enough space to cut a new junction in.
          No thanks.

          Anyway itโ€™s good exercise.

          • Arthur Schopenhauer

            The Melbourne Earthquake cracked the water main up the street. Melbourne Water were at it the whole weekend. The guys said theyโ€™d had over 120 similar faults across the NE.

            Plumbers delight!

    • Donโ€™t be the last to run for the door if needed. Not much liquidity in those markets and execution times blow out if volumes rapidly rise.

      • Definitely. My question was one based on curiosity. I’ve heard so many tales of dodgy exchanges and nonexistent cash reserves that a run would make Evergrande seem to be an orderly line at the coat check after the matinee showing.

  2. ErmingtonPlumbingMEMBER

    I just finished listening to this podcast on my walk along the river.
    Iโ€™m not feeling as anxious about being caught out the rain in the middle of my dig up tomorrow after listening to it.

    Is our political situation today really akin to the rise of fascism in the Weimar Republic?
    According to Skippyโ€™s mate Philip Mirowski it is.
    This becomes a good Covid related podcast especially once you get past halfway

    • What I’m not comfortable with (and I’ll listen to the Podcast later) is the current rhetoric around China. Yes I have issues with China, but it seems everyone is done with Diplomacy and instead looking to war.

      I would rather we try and find a more common middle ground than seek to alienate them. The CCP will no doubt turn domestic problems into those caused by Johnny Foreigner as part of their narrative.

      It makes me feel WW3 is potentially around the corner.

      • Hill Billy 55MEMBER

        Read a really interesting book in the UK a few years ago on the lead up to WWI and the parrots were going for it 6 years before the event, i.e., 1908. So by the time the Serbs shot the Prince, Europe was a tinder box with those 6 years of propaganda on both sides wanting war. As you said, I don’t think we have a similar time line before the next conflagration. More’s the pity.

      • Even StevenMEMBER

        Broadly agree with your sentiments but argue some specifics.

        We have not alienated China. Any assertion to the contrary is a distortion of reality, in my view.

        Having said that, peace should always be pursued. Having made it clear now that we will not be bullied, now is the time to reach out to China. Negotiate from a position of strength not weakness.

        At some level, China now takes us more seriously than they did two years ago. Respect is going too far… But… Not a push over? Probably closer to the mark.

        • I agree with that and it’s about time we showed we were more assertive instead of bending over backwards each time China has a hissy fit. I was never comfortable with so much reliance on China economically. So I’m glad we’ve moved away in many respects.

          I do think NZ is worse than us in this regard and we would be the first to step in for the Kiwi’s if things went sour, and I tend to agree now is a better time to negotiate.

          I just can’t help but feel there is a larger narrative of trying to turn China into the boogeyman and I wonder what the ulterior motives are.

    • Arthur Schopenhauer

      Food was expensive, unemployment was very high and there was a great deal of inequity in 1920s Germany, along with a deeply dented national pride. Public Institutions were poorly funded due to the War Reparations (partly negotiated by Billy Hughes).

      Similar to the US, not Australia.

      Edit: Thereโ€™s plenty of ferment looking for a Napoleon, and a President almost as old as Franz Joseph I in the Whitehouse.

        • ErmingtonPlumbingMEMBER

          More 1938 Czechoslovakia just before the annexation of the Sudetenland.

          With The Pilbara,โ€ฆmaybe,โ€ฆbeing our Sudetenland?

          • The Traveling Wilbur ๐Ÿ™‰๐Ÿ™ˆ๐Ÿ™Š

            Think Stalingrad: won the battle, lost the war. And the part three of the reich didn’t go to well after either.

        • The Traveling Wilbur ๐Ÿ™‰๐Ÿ™ˆ๐Ÿ™Š

          More 1941 Russia.

          Eventually we’d figure out all we had to do was burn the housing down, and away they’d go – back where they invaded from.

          • ErmingtonPlumbingMEMBER

            Russia had a large population in comparison to their German enemy.
            They used that population to out manufacture and out die their technologically superior adversary.
            We have neither advantage in Australia.

            Our only hope is to preserve our housing to encourage China not to nuke us but rather to turn Australia into a Gated community for the CCPs top 25 million most cashed up families.
            Best to have all our kids learn Mandarin so they may better serve them.

    • I do tend to agree though that Covid ain’t going away. And we will continue to have eaves of it each year. Requiring ongoing changes to our way of life and no more back to normal routine.

      I’ve been thinking this is the case for some time, and that getting vaccinated may help with this first round, but may not on the second or third. Given it’s a flu like strain thar may continue to change each year.

      If that’s the case then interesting times lay ahead. I am starting to think being more and more self sufficient is the way to go.

  3. I think I might get myself into debt… develop an amphetamine habbit… take on a sex addiction… watch loads of tv… pop uppers in the morning and downers in the evening… and go full addiction. Where’s the brothels man?

    … coz your really not living life unless your truly addicted to something.

    Who needs nature and humanity? Just buy a vibrator man. All the pleasure one could have in a tiny technilogical capitalistic device. Raw pleasure with the pop of a pill.

    Nature, walks in the bush and animals are so over-rated. Why do boring things when you can have the same thrills from a pill? Compressed excitement. Gotta move with the times, maaaan. heh.

    We should all be addicted to something and make our friends addicted to.

    Your never truly happy unless you have an Addiction.

    Aussie Aussie Aussie