Macro Afternoon

See the latest Australian dollar analysis here:

Shorts puke the Australian dollar

The mixed start to the trading week here in Asia continues with local stocks pulling back but not as much as feared given the selloff on Wall Street overnight or the growing property developer contagion in China. US stock futures are flat while the USD is strengthening against most of the risk currencies with gold pulling back to the $1760USD per ounce level. Meanwhile Bitcoin has been able to advance ever so slightly on its recent surge, hovering above the $49K level which represents a clear break of the previous weekly high:

Mainland Chinese markets are still closed for a holiday while the Hang Seng Index held on bravely with a scratch session to finish just above the 24000 point level while Japanese markets continued their sell mode with the Nikkei 225 closing 2% lower to 27835 points. The USDJPY pair is holding on though, decelerating into the 111 zone after making a new weekly low previously, with momentum still deeply negative but no new session lows:

Australian stocks managed only a minor selloff with the ASX200 down 0.4% to 7248 points while the Australian dollar  has reversed all of yesterday’s gains and then some after today’s non-event RBA meeting, getting straight back to the mid 72 level and well below last week’s high:

Eurostoxx and S&P futures are flat going into the London open, with both major markets poised here at multi week or month support as the four hourly chart of the S&P500 clearly shows. A lack of buyers at the 4250 point level will see this taken out and turn into a full proper correction, but watch the BTFD crowd to step in and bid above the 4300 point level:

The economic calendar includes final services PMI results for Europe and Germany, while US trade balance and non-manufacturing PMI prints will dominate.

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Comments

  1. The Travelling Phantom

    https://www.theage.com.au/national/victoria/teacher-vaccine-mandate-challenge-to-go-to-trial-20211005-p58x99.html
    She went to the superemo court , the government lawyer asked to postpone the case, cause lots on their plate. Judge said, when you mandate the vax you should had already prepared the procedure in case someone would challenge you 😏.

    Seems to me government haven’t planned for court!!
    Any similar cases in other states?

  2. Mining BoganMEMBER

    It’s Fat Bear Tuesday!!!

    https://explore.org/fat-bear-week

    The old fella Otis saw off the remarkedly feeble challenge from the bear with no name to move through to the final against Walker the Bear. Otis gives away quite a few kilos in size but has the crowd on his size through a massive wave of emotion, with the very good chance that this will be his last year.

    Walker will have to wait until after a tear is shed for Otis.

  3. Hugh PavletichMEMBER

    China … being taught political and economic lessons … the hard way …

    … Sadly … the emerging enormous costs of long – term poor judgements … across the board …

    China property sector default woes deepen amid Evergrande uncertainty … Clare Jim and Tom Westbrook … Reuters

    https://www.reuters.com/world/china/china-property-sector-woes-deepen-markets-await-evergrande-deal-2021-10-05/

    HONG KONG, Oct 5 (Reuters) – Worries about rising debt defaults by Chinese property developers sapped investor sentiment on Tuesday amid fresh credit rating downgrades and uncertainty about the fate of China Evergrande Group as it scrambles to raise cash by selling assets. … read more via hyperlink above …

    Chinese developer misses bond payment as stress spreads beyond Evergrande crisis … Weizhen Tan … CNBC

    https://www.cnbc.com/2021/10/05/china-property-default-risk-for-fantasia-sinic-amid-evergrande-crisis.html

    China needs coal, and Australia has it. But something’s standing in the way … CNBC

    https://www.cnbc.com/2021/10/05/china-power-supply-crunch-relationship-with-australia-gdp-outlook.html

    How did Beijing dig a massive hole for itself? And how Australia could shrug off China… China Insights

    https://www.youtube.com/watch?v=QYaA69EvHGw&t=2s

    • Like creating the toxic financial product that almost blew up the entire world financial system and then in the process of fixing it enabled the largest transfer of wealth upward in modernity …. that kinda of lesson – ????? – and never learned[tm] from the mistakes that created the mess in the first place ….

      • Hugh PavletichMEMBER

        Skippy … even the CCP has woken up on the housing issue. Lets hope you do too …

        China’s ‘Volcker moment’ is a mounting risk to the global recovery … OPINION Ambrose Evans – Pritchard … UK Telegraph

        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

        ‘… 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. …’

        Guess where all this is heading ?

        What the Global Times (CCP mouthpiece) had to say back in 2018 … excerpt …

        Housing costs key constraint to Chinese consumption … Yi Xianrong … Global Times

        https://www.globaltimes.cn/content/1121946.shtml

        ‘… High real estate expenses have two aspects – housing prices and rents are both too high. A reasonable home price should be three to six times the median household ( individual … top 3.0 times for households ? – HP comment ) income. That means a family with an average income can buy a house with three to six years’ annual income. The house price to income ratio in China is above 50 in the first-tier cities and 30 to 40 in the third- and fourth-tier cities.

        But the whole country, from policymakers to real estate speculators, has turned a blind eye to the problem. These high housing costs are squeezing the consumption ability of Chinese people.’ … read more via hyperlink above …

        • Housing is an after affect of more core economic issues which in turn create the issues at onset, per se with 400%+ increase in productivity in the developed world since the 70s that share has all gone to the upper social classes, yet ideologues like you and yours myopically fixate on housing e.g. everything else in fine.

          Anywho contrary to your suggestion that China has learned something and RE is it focus is inaccurate, they are more focused of distribution per capita, putting billionaires in their place, banning non productive investment like crypto, and a cornicopia of other this of which primary RE is but a single data point.

          But hay don’t let facts get in your way of bending things to conform to your pure ideological pursuit.

          • Went through this a long time ago with is pals at demographica e.g its an ideological front group out of the U.S. which has promoted the house and car as being synonymous with freedom and liberty. Meanwhile pre GFC he was helping his developer buddies push back filled wetland/mangrove/high risk natural event RE up the sunny coast as …. lower coast primary RE …

            Is it just me or is it the ones promoting freedom the loudest have the least of it up in their[????] heads ….

        • Ownership and funding of the creation of Laws ….

          TTP … its just the historical account on record IMO and no differant to say the propaganda Friedman and Stigler wrote for the developer lobby post WWII.

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