Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Asian stock markets are being weighed down by Chinese shares selling off in the wake of the Evergrande crisis with Japanese shares also down sharply. Currency markets are seeing a modest return to strength by the USD, although gold is itching higher trying to get back above the $1800USD per ounce level. Meanwhile Bitcoin has retraced slightly from its new record high, hovering just below the $65K level:

The Shanghai Composite is selling off quickly going into the close, currently down 0.2% to 3580 points, while the Hang Seng Index is taking back all of the previous session gains to be down 1.1% at 25846 points. Japanese markets are also in retreat mode with the Nikkei 225 closing nearly 2% lower at 28703 points as the USDJPY pair continues its very mild retracement from overnight to slightly dip below the 114 level:

Australian stocks are largely unchanged with the ASX200 closing above the 7400 point level again, finishing at 7413 points while the Australian dollar has had a very minor pullback to dip just below the 75 level against USD:

Eurostoxx and S&P futures are falling back in line with Asian shares as we head into the London session, with the four hourly chart of the S&P500 showing price breaking below that bearish rising wedge pattern that has formed from the start of the week as it got ahead of itself above the 4500 point level. But support remains strong here for now:

The economic calendar includes US initial weekly jobless claims and existing home sales data tonight.

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  1. The Travelling PhantomMEMBER

    Finally got my tax return and joined the mile high club, and a membership too!
    Hope you all been well
    How’s the boat Harry?
    TTW are you still HODLING?
    JohnR how’s the lab?
    Hopefully Boom got better customers and body corporate!

  2. Comment from FT article on Evergrande by Bounded Rationality:
    Amazing that Beijing can jump out of the boat but miss the water! Currently all developers in China have been banned from “malicious price cuts” [WSJ]. So, the market mechanism of price cut to sell inventory is eliminated. New home buyers will steer clear. Second hand homes built earlier in the year have dropped 10% but are selling (why buy new?).
    With little sales, developers cannot complete existing homes and pay suppliers and bondholders (systemic risk). Further, provinces are now seizing local projects of the builders. So, likely defaults by half the developers, all highly leveraged firms, will endanger suppliers and banking sector solvency.
    Next the provinces (typically highly indebted) are selling 43% less in land auctions. Little revenue will leave them unable to service the debt – no property tax on the horizon with CCP cadre, property owners all, opposing. Defaults will follow among provinces in a short order.
    Can Beijing bail out? With a pegged currency, bailouts will cause ST RMB appreciation (LT is unclear) hammering China’s exports (add in supply chains and power cuts). Of course China will intervene but sterlization to control inflation will be needed. RMB will be relentlessly attacked by hedge funds including Mr. Dalio’s to test China’s resolve (e.g. 1997 Asian Currency Crisis). Nevertheless, having destroyed Chinese household wealth (over 80% in homes) at a hypersonic pace, Mr. Xi will have accomplished the goal of reducing wealthy inequality πŸ™‚

  3. This Melbourne property developer appears to be a man Reusa would hold in high esteem.

    He met a chinese lady friend through a ‘seeking arrangements’ website and allegedly reneged on the ‘sugar daddy’ part of the bargain. From the article in appears the sugar baby also had some visa issues she wanted sorting. Perhaps she is still amendable to any of you big Aussie boys helping her out …

    [also funny is that this Australian court session interrogation was done through intepreters as neither is fluent in english]

    • SnappedUpSavvyMEMBER

      That’s the most e z f k a story I’ve ever heard.
      Property developer Barry Wang
      Real Estate agent sugar baby with visa problems
      Neither speak English
      Suing in an Australian court

      • I hope Betoota Advocate does a story using this as a template. But I think they will struggle to take it further…

    • A modern Australian love tragedy.
      Back in the day, Bazza from Shepparton would have got on the turps and shagged his wife’s best friend and now she’s taking the family home in a messy divorce settlement.
      Forget all that, it could have been Barnaby from Armidale got it on with his staffer..

  4. Both Dalian Iron ore and Coking Coal off the edge of the cliff this arvo!! Something going down in China.

  5. The Traveling Wilbur πŸ™‰πŸ™ˆπŸ™Š

    Freedom day = Take an OAP to the cemetery day.

    Good luck everybody.

    • Jumping jack flash

      More stimulus still required. But good luck with not getting punished for doing it at this late stage of the game.

      That new COVID variant might be the perfect cover if it turns out to be vaccine resistant though.

    • While the only vaccines available neither stop someone getting infected, nor being infectious and as a result encourage both careless behaviour in the vaccinated and viral mutations, never…

    • At what point can an anti-vax stance be considered reckless conduct endangering life?

      At the point that the vax that the person is anti is proven to be safe and effective against a virus that is proven to be deadly AND where no other safe treatment exists.

      • Lord DudleyMEMBER

        “At the point that the vax that the person is anti is proven to be safe and effective against a virus that is proven to be deadly”

        That has already happened. See approvals from regulatory bodies all over the world, plus hundreds of millions of doses in the US alone. Of course, no amount of evidence will convince the evil stupid anti-vax crowd such as yourself. You should be removed from society.

        Here’s how evil you are: look at this mentally disabled couple in the link below. She worked at McDonalds. He clearly can’t work. She didn’t get the vaccine and is now dead, because of disinformation from anti-vaxxer scum such as yourself. Again, you are evil and should be removed from society.

        • Overfed and dead.

          What’s your point fktrd. You can’t blame covid for 30 years of gluttony and sitting on your fat ass. It really sounds like your stuck in the states now your just throwing grenades cause the borders shut. I bet the sepos think your a looser.

  6. The Traveling Wilbur πŸ™‰πŸ™ˆπŸ™Š

    So if you only had one question to ask Chris Martin, it would have to be “Does it? Well does, it? Really?”, right?

      • Chris Martin Facts:
        -Despite playing 308 innings in total (International and First Class, Test and ODI’s), he passed double figures 12 times.
        -Chris has scored the Most Golden Ducks in Test Cricket (7)
        -Chris hold the record number of times for being bowled in Test matches (27)
        -Had an unbelievable streak of 23 Test Match Innings, without scoring a single run.
        -Chris has the lowest Strike Rate (Exactly 20) for any batsman that has completed 100 innings
        -Statistically the most consistent Batsman EVER! Bradman, Tendulkar, Lara or even Ponting don’t come close

        He probably holds the most of New Zealand’s batting records (Not the good ones anyway, but they are still records..).

  7. Hugh PavletichMEMBER

    China …

    China Evergrande secures bond extension as property sector turmoil deepens … Clare Jim and Andrew Galbraith … Reuters

    Tense times for China’s Evergrande as unit sale collapses … DW

    Hong Kong stocks drop as Alibaba, Evergrande retreat after China signals no imminent stimulus to spur short-term growth … Iris Ouyang … South China Morning Post

    Ghost cities crash as China declares an end to pointless building … David Llewellyn-Smith … MacroBusiness Australia