Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

A red day for Asian stocks as risk sentiment evaporates following the overnight machinations in US government and Chinese heavyhandedness regarding the Evergrande and energy disasters. The USD remains very firm against most of the risk currencies as the Australian dollar remains under stress following the recent postponement of European free trade talks while local shares took a big hit. Meanwhile Bitcoin is almost back to its start of week position at the $44K level as gold tries to maintain a level above $1750USD per ounce after last night’s solid swing back:

Chinese markets are closed for a holiday while Japanese markets are not just pulling back but outright selling off in fear as the Nikkei 225 closes over 2% lower to 28818 points as Yen buying accelerates. The USDJPY pair is coming back to the 111 handle and while it hasn’t yet made a new intraweek low, ATR support is tentative here:

Australian stocks could not escape the carnage, with the ASX200 taking back all of its recent gains and then some, down over 2% to finish at 7168 points, embiggned for a wider selloff next week. The Australian dollar is really struggling again after previously lifting through the 72 handle, but resistance is clearly too strong overhead here after recently putting in a new weekly low:

Eurostoxx and S&P futures are very flat indeed going into the London open, with the daily chart of the S&P500 showing that large head and shoulders pattern coming to fruition as it approaches the July lows at the 4250 level, ready for a full capitulation:

The economic calendar finishes the week with yet another jam packed schedule with German retail sales, Euro-wide core inflation, then US core price index and final ISM manufacturing PMI prints for September.

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Comments

    • Interesting
      For a long time Aluminum has been know as solid Electricity but if the truth be told this title belongs to Silicon, especially the highly refined pure Silicon that’s suited to use in Semiconductors.
      As PV array prices dropped and dropped and dropped more than few fingers were busy dancing across the calculator keys and exclaiming “this doesn’t make any sense”. It takes a heck of a lot of electricity to make a Solar panel yet solar panel prices were dropping at the same time as coal prices climbed…like how is this sustainable?
      Well as it turns out it isn’t. Today in China Electricity producers are starting to pass their costs on to their biggest industrial customers and predictably we have sudden shortages in processed Silicon with prices for Semiconductor grade silicon rocketing skyward.
      One thing for certain, it is going to be fun watching this cycle settle out.

  1. For ICAC to fell another sitting Premier it had better hope they get a corrupt finding.
    If they roll the dice and lose then watch out for some reforms coming their way.
    The charges look pretty light to me:
    “The Premier will be questioned about grants awarded or promised to the Australian Clay Target Association in Wagga Wagga and to the Riverina Conservatorium of Music in Wagga Wagga at a time when Mr Maguire was the local member.”
    I mean, two random community organisations got a grant. Blow me down. The State Government would waste millions every year in departments from Health to Education, Treasury etc and ICAC are checking on some grants to the conservatorium of music in Wagga Wagga?
    I mean, pork barrelling community grants to sympathetic electorates isn’t actually corruption in my book. Eddie Obeid trying to make personal wealth YES. Giving out grants to community organisations? NO. Don’t like the grants? Vote them out – they are not enriching themselves personally.
    As I said, they better make sure of this finding …

  2. SnappedUpSavvyMEMBER

    Can I just say, Sydney needs a statue of the bin chicken in Hyde Park, suitability covered in bin chicken shyt and surrounded by flowers laid by eastern suburbs property investors

  3. Who called their presser first, the scrotum or Ms bin Chicken? Which ever way it went Scotty’s message got totally buried in the the media storm that was Gladys. I reckon that sly [email protected] took the opportunity to sneak out a few stinkers. (?)

  4. On footsie being Oscar.

    “To lose one premier may be regarded as a misfortune, to lose two looks like carelessness”

    Oh very droll footsie.

  5. got my first jab at 11am. The Dr did not say I have to follow any diet or not to drink. While at my 4th shot I find out that apparently I am not suppose to drink alcohol for about a week. wtf…

    • Mining BoganMEMBER

      Work on the theory that alcohol thins the blood therefore negating the chance of nasty blood clots.

      In my professional opinion I would advise staying drunk for a week.

    • ‘I am not suppose to drink alcohol for about a week’

      Serious? If they told everyone that then the vax rate would be 20% tops.

    • SnappedUpSavvyMEMBER

      By who? I drank a bottle of wine after each one and I’ve got no no no no no no no … hardly any symptoms

    • jab at 11? So I’m assuming you were well into your pre-luncheon drinkies by the time you heard the news.

      • started drinking at around 3.30pm when I stopped trading. Last trade was short on russell 2000 and closed it while I was sipping my first..

  6. How the heck is the aust govt recognising sinovac? What the?

    Let’s see it rip thru the place after all those students come in on the dodgy vaccines

    • Frank DrebinMEMBER

      You don’t think it’s already ripping through the place ?.

      The zero Covid reality has passed man, time to reimagine the future

    • The ponzi rates higher than a few thousand Aussie deaths. They will be replaced in a week when we’re “back to normal”.

  7. Hey Harry I need some help with some modern word usage. The ABC reckons that Gladys and Darryl were “dating”. I thought dating was something kids did, off to Maccas or some ten pin bowling. Given that neither Dazza nor the bin Chicken are spring chickens, and given they never went out in public together I would have thought that they were shagging. Are the two terms interchangeable? Maybe “going steady” is more apt.

  8. TailorTrashMEMBER

    Having some interaction with the medical profession at the moment ……

    thought I was smooth………but jeez …??
    …now there is a well organised and coordinated lot who know how to ease the boomers of their fortunate wealth ….

    There Their …..now did I get that right ?

  9. Poor Leigh Sales…she’s in mourning…wearing all black tonight.

    Meanwhile, PARTY at Palaszczuk’s place tonight!!

    • The Traveling Wilbur 🙉🙈🙊

      True colors shinning through.
      True colors and that’s why I

      Don’t watch the 7:30 Report anymore.
      Not once.
      And it used to be essential viewing.

    • C'est de la folieMEMBER

      I feel cheated by Gladys departing now before a corruption claim…….

      I wanted her roasted alive by QC tongues in a Royal Commission into Covid and Australia for her role and policy in deliberately importing and cultivating COVID in Australia to the point where it couldnt be eliminated.

  10. Australia could be fully vaccinated by end of October if “mix and match” jabs were allowed
    It happens in other countries – so why the hell can’t we mix and match jabs here?

    I know someone in Canada that had first dose AZ, and second dose Moderna.

    There were many people in Europe who had first doze AZ and second dose Pfizer.

    So with the population already close to 80% single and 50% double dosed, and a further 12m doses arriving in October alone – if they allowed “mix and match” dosing Australia could be fully covered by the end of October.

    All ATAGI has to do is pull the trigger and make the same decision as the USA, UK, Canada, and many other OECD countries – and it happens. Certainly given the situation in Sydney and Melbourne we should be considering it – or else we will end up risking actually having millions of surplus doses of the vaccine at the end of the October!

    Does anyone else think this should be considered more?

    • Yes, especially because AZ followed by Pfizer is apparently even more effective than 1 of the other on its own.

    • Rorke's DriftMEMBER

      It would mess up the live trial they are running.There were no effective trials done before this experimental shot got rolled out, so they need the victims to take the pure cocktails to properly measure what happens.

    • There’s no need to think about anything any more, the science is settled and only infidels ask questions.

  11. Hugh PavletichMEMBER

    Merck’s Covid – 19 Pill …

    Pill to treat Covid-19 cuts the risk of death by half, says Merck, which will seek its emergency authorization … CNN

    https://edition.cnn.com/2021/10/01/health/us-coronavirus-friday/index.html

    Merck’s COVID-19 pill cuts risk of death, hospitalization by 50% in study … Reuters

    https://www.reuters.com/business/healthcare-pharmaceuticals/mercks-covid-19-pill-cuts-risk-death-hospitalization-by-50-study-2021-10-01/

    “This Is A Game-Changer” – Merck Releasing “Phenomenal” Test Results For Experimental COVID Pill … Zerohedge

    https://www.zerohedge.com/markets/game-changer-merck-releasing-phenomenal-test-results-experimental-covid-pill

    • The Traveling Wilbur 🙉🙈🙊

      Just 1 pill cuts your risk of dying from COVID by HALF?????!

      Two please. 😀

  12. As in just been completely kiboshed in China then failed in the first failed state who tried to adopt it.
    But it goes up 10% in 1/2 hr? spare me.
    Based on what?better than expected earnings?
    still can’t figure out why this is allowed to be traded.
    As in if Dan can set a curfew, Bitcoin can be ended in a 6am briefing.
    is that priced in? Oh yeah nothing is priced in except the idiocy of libertarians.

      • do you think its manipulation?
        As in, if ASX 100 company cut its earning forecast to nil in perpetuity, and the stock lifted 10% on the announcement, would you say something didn’t add up.
        Yet its perfectly fine for this fake asset thoroughfare from dumb money to whales.

  13. Hugh PavletichMEMBER

    China … Evergrande …

    Evergrande: Could it be the end of the road for the world’s most indebted property developer, as US$37 billion bill comes due? … Chad Bray and Pearl Liu … South China Morning Post

    https://www.scmp.com/business/banking-finance/article/3150868/evergrande-could-it-be-end-road-worlds-most-indebted

    • There is mounting fear about developer’s ability to repay piling debt against the backdrop of muted property sales and efforts by Beijing to rein in the property sector
    • The company ‘is no longer a viable business’, say TS Lombard analysts … read more via hyperlink above …

  14. Hugh PavletichMEMBER

    New housing production: Is New Zealand, on a population adjusted basis, starting to build more new homes than any other country ? …

    The Economist estimates that China is currently producing about 15 million new residential units per year …

    Can China’s long property boom hold? … The Economist
    … behind paywall …

    https://www.economist.com/finance-and-economics/2021/01/25/can-chinas-long-property-boom-hold

    … extract …

    ‘ … Every year China starts building about 15m new homes, more than quintuple the amount in America and Europe combined. The property sector—both the direct impact of construction and its indirect effect on everything from concrete to curtains—makes up a quarter of China’s GDP. The financial implications are profound, too. …’

    The current population clock for China is 1,449,547,660. Therefore this suggests its overall dwelling start rate per 1000 population per annum is about 10.34.

    For the month of August 2021 Statistics New Zealand reported …

    Building consents issued: August 2021 … Statistics New Zealand

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

    … extracts …

    • ‘ … In August 2021, the seasonally adjusted number of new dwellings consented rose 3.8 percent, after rising 2.2 percent in July 2021.
    • In the year ended August 2021, the actual number of new dwellings consented was 46,453, up 24 percent from the August 2020 year.
    • In the year ended August 2021, the number of new dwellings consented per 1,000 residents was 9.1, compared with 7.4 in the August 2020 year.
    • In August 2021, 4,490 new dwellings were consented …’

    Annualizing the August dwelling consent / approval volume of 4,490 is 53,880.

    New Zealand’s population clock is 5,147,535. Therefore the August consents figure annualized suggests 10.46 consents per 1000 population per annum … a whisker ahead of China’s current annual production of 10.34 starts (not consents or completions) per 1000 population per annum.

    China’s new dwelling construction is likely currently slipping, due to its estimated 60 plus million empty dwellings and rapidly slumping birthrate …

    China’s population could halve within the next 45 years, new study warns … Stephen Chan … South China Morning Post

    https://www.scmp.com/news/china/science/article/3150699/chinas-population-could-halve-within-next-45-years-new-study

    … and energy shortages … and to … hidden debt issues coming to light … to illustrate …

    Goldman Flags $8.2 Trillion Threat Worse Than China Evergrande … William Pesek … Forbes

    https://www.forbes.com/sites/williampesek/2021/09/30/goldman-flags-82-trillion-threat-worse-than-china-evergrande/?sh=7c35f4cc15cc

    It appears Australia’s approval / consenting rate per 1000 population per annum is currently about 8.4, Canada’s 7.2, Ireland 5.7, United States 4.9 and the United Kingdom about 1.9.

    On a population adjusted basis the United Kingdom appears to be producing less than 20% the new dwellings New Zealand is.

    It seems New Zealand is on track to becoming, on a population adjusted basis, the highest new dwelling producer in the world. Particularly with the foundation of 24% growth in dwelling consents / approvals over the past year.