Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Asian stock markets are holding on to minor gains following the news of a debt payment made by Evergrande crisis with risk currencies lifting after getting pummeled by USD overnight. Japanese shares are pushing the hardest on their latest inflation print, while gold is inching its wayback to the $1800USD per ounce level. Meanwhile Bitcoin is teetering just below the $63K level after a flash crash wiped a lot of sentiment away from its recent new record high:

The Shanghai Composite is trying to stabilise going into the close, currently flat after being down earlier in the session, while the Hang Seng Index is building on early gains to be up 0.4% at 26132 points. Japanese markets are also lifting slightly with the Nikkei 225 about to close nearly 0.4% higher at 28834 points as the USDJPY pair has a minor bounceback on the latest Japanese inflation print to just get back to the 114 level:

Australian stocks are largely unchanged with the ASX200 about to close above the 7400 point level again, struggling with a lot of internal resistance and lack of momentum as we end the trading week while the Australian dollar is also looking a little lacklustre, having had a tiny bounce to be at the 74.70 level following last night’s pullback below the 75 handle:

Eurostoxx and S&P futures are slowly lifting, as we head into the London session, with the four hourly chart of the S&P500 showing price breaking out above the nascent bearish rising wedge pattern and just keeping on keeping on until the Fed taper kicks in. Short and medium term support remains strong here for now:

The economic calendar packs a lot in to end the week, with a slew of manufacturing and services PMI surveys across Europe and the US.

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Comments

  1. C'est de la folieMEMBER

    Another population ponzi spruiking plate full of half masticated tropes from Liz Allen…..


    So Australia wants to welcome migrants again? Good luck with that

    https://www.theage.com.au/national/so-australia-wants-to-welcome-migrants-again-good-luck-with-that-20211021-p591te.html
    October 22, 2021 — 5.00am
    Liz Allen
    Demographer

    Suddenly everybody’s talking about immigration. As Australia opens up and emerges from almost two years of global isolation due to the COVID-19 pandemic, federal Treasurer Josh Frydenberg warns our record low population growth – due to closed borders – will act as a handbrake on the economy in coming decades. The Australian Chamber of Commerce is calling for a big injection of skilled migrants. And Premier Dominic Perrottet wants a “big NSW”. Bring back the migrants, reignite the economy!

    Well, good luck with that, Australia.

    Already there is a sense that Liz knows she is pushing the wall of stools up a 1 in 3 incline with a pole.  She has a slender grasp on a point.  There has been an awful lot of talk about immigration in the recent past.  But it has all been a distinctive kind of talk.  It has all been very one dimensional and exhibiting one of 3 distinctive traits:-

    1.       Lots of talk about the need to all of a sudden start bringing massive numbers of people back into the country, without giving any sense that there may be some downsides worth mentioning, let alone considering. OR

    2.       Lots of talk about the need to all of a sudden start bringing massive numbers of people back into the country fuelled by comments from Aig or ACCI or from business leaders running a model of harvesting all the additional bums on seats – see above – without acknowledgement that they have a direct pecuniary interest in selling that message. OR

    3.       Lots of talk about the need to all of a sudden start bringing massive numbers of people back into the country, with public comments turned off

    It has been notable for being bereft any balance, perspective or attempt to engage with people who are either not in complete agreement, or who may have a differing view.  It has been based in assumptions nobody wants to explore.  It has been an exhortation.  It has all been about belief and not rationale……

    Nobody wants anyone thinking about immigration, and it appears lots of people would like those who do think about immigration not to write their thoughts as comments anywhere near immigration related articles in the press………..here’s looking at you, Ninefax….

    Anyway, back to Liz…..

    Already there is evidence that people overseas looking to migrate are considering countries such as Canada and the United States over Australia. The US, Canada and Britain were already in stiff competition with Australia to attract the best and brightest, but this competition is only set to increase.

    Liz opts for the faux thinking of the Age……we are in a competition……  Someone is choosing Canada, the US or UK instead of us – and we should be looking to beat them by encouraging people to come here instead.

    Liz shouldn’t be such an idiot.  Such a competition only exists in the minds of those who have never set foot in Canada the US or UK – where precisely the same concerns about immigration and its use as a national economic policy driver exist as those that people like Liz would rather weren’t given opportunity to slip their comments into the media here.  British PM Boris Johnston summed it up quite nicely recently when he noted that…..

    “The way forward for our country is not to just pull the big lever marked uncontrolled immigration, and allow in huge numbers of people to do work … So what I won’t do is go back to the old failed model of low wages, low skills supported by uncontrolled immigration,”

    It doesn’t sound like Boris is competing with us to get more people, does it…..

    Indeed a lot of people – the type of person denied a place in Australia’s mainstream media, and certainly closed out of commenting on immigration related articles at Ninefax – would be thinking ‘If Boris is thinking uncontrolled immigration is connected with low wages, what are the controls on our immigration seeing as I have been getting low wages?’ – leading to all sorts of observations about economic growth and immigration of the type regularly run by Leith and David here at MB, but rarely aired anywhere else.

    And back again to Liz…..for a serving of utter codswallop

    I fear the damage done during COVID through the lack of goodwill shown to temporary migrants, a critical source of skills in the Australian workforce, will undermine any renewed efforts to welcome much-needed people from overseas. Prime Minister Scott Morrison told non-citizens living in Australia to “go home” and the government denied financial assistance to temporary migrants, forcing many to rely on donations.

    Australia has lost its sheen.

    Dear Liz, could you nominate a country anywhere – particularly amongst those nominated as preferred destinations for migrants as you have outlined in the previous stanza – which has treated temporary migrants in any way differently than Australia has done?  Is there a single country in the OECD which has provided financial support?  Is there a nation in the OECD which did not tell temporary migrants it was in their interests to go home when Covid 19 first hit?

    Then there is the assertion from Liz that temporary migrants are a ‘critical source of skills in the Australian workforce ’ – which brings us to the question of a critical source of skills to do what?  There might be some specific types of technician or professional or medical type that we aren’t producing or cant produce at short notice here in a nation with a first world education system, but how desperate are we for those ‘’critical’ skills?  How many of those temporary migrants are here as students, or doing low level menial administrative or labouring work or picking fruit and veggies?

    Australia may or may not have lost its sheen, but not in relation to any other nation…….and Liz is trying to sheen up a turd.

    COVID-19 has been a natural experiment of sorts, proving the importance of immigration and the valuable contributions of migrants for the nation. A lack of labour in the horticultural sector has resulted in produce being left to rot rather than being picked and sold in national and international markets. Amid the crushing economic pressures of the global pandemic and industries being frozen by public health measures to keep the nation safe, our local skills and workforce have been insufficient to meet demands.

    Additionally, the COVID-19 population experiment has demonstrated that migrants are not inflating housing costs, do not steal local jobs and nor do they suppress local wages. Net overseas migration is expected to be minus-77,400 this year and yet house prices, say Westpac economists, will surge 22 per cent. Meanwhile, we’ve had lower-than-expected unemployment and low wage growth, all while the borders have been shut. With this arsenal of evidence, you’d be forgiven for thinking immigration could recommence without public opposition and return to pre-pandemic levels without delay.

    Liz is back to bemoan that ‘critical’ skills loss resulting in our farmers being unable to increase wages enough to entice locals to pick their produce.  And here we were thinking that those farmers would find a way to make it happen if there was money to be made in it.

    Next she wades in with the pandemic ‘demonstrating’ that migrants aren’t inflating housing costs, not taking local employment opportunities or suppressing local wages.  Someone could get through to Liz and mention that 120 Billion worth of fiscal stimulus and barrel bottom interest rates can offset loss of demand from migrants vis housing, and the rising incomes in some sectors following the departure easily accessible migrants (after they were advised to go home) might count against her contentions.

      Recent commentary about a bigger Australia has prompted discussion about a migration-led population boom to kickstart the national economy. The federal Treasurer and minister responsible for immigration have both signalled the importance of immigration and the need to get the borders open. The Labor opposition is seemingly taking a more cautious approach to immigration and has been busy talking about reincarnating local industries with roots in the 1950s, such as car-making, to secure local jobs. But both major parties know the socio-economic importance of immigration.

    I would like to see immigration feature in a post-pandemic recovery. I’m all for immigration that compliments the local demographic needs. And Australia needs more working-age people to get the country going again.

    One sense the shrillness of Liz’ exhortations about here.  When she says ‘both major parties…..’ you can hear her thinking ‘don’t they?’  And that that observation about local industries and local jobs sure doesn’t sound like everyone has bought the immigration has no effect on jobs and incomes line, does it?

    She is on thin ice and she knows it’s cracked….

    But Australia will struggle to meet the demand for immigration and necessary skills in the short-term. Australia’s diplomatic tensions with China and COVID pressures in India will constrain the flow of migrants from the two largest source countries. Canada is the No.1 preferred destination for international students, followed by the US and Britain. Australia takes out fourth place.

    She is back with the competition theme again.  But only after questioning where the migrants will come from if they don’t come from China or India.  Maybe we should have a national immigration mandate of no more than 10% of migrants from any country? (to diversify the risk). But she doesn’t mention that Australia wont ’struggle’ because there is very very little ‘demand’ for migrants in either the short or any other term, and the only demand she has referred to in this entire piece is for fruit and vegetable pickers.

    If the projections of the federal government’s 2021 Intergenerational Report are anything to go by, Australia’s population growth and migration intake are going to be slower and lower, and neither will fully recover to pre-COVID levels. This is the short and medium outlook.

    Australia needs to reset after the devastating economic and demographic impacts of COVID. Call it our post-pandemic rebuild, and it will be a watershed. Immigration will necessarily feature. But I don’t anticipate immigration increases will occur in the near future, not for want of trying on Australia’s part but because it has lost its sparkle.

    She closes out this lifeless piece of inane verbiage questioning projections in the Intergenerational report without ever considering where economic growth could ever be reflective of anything other than ever increasing numbers of people.

    Liz misses the point that Australia hasn’t lost its sparkle – it is regaining just enough sparkle (lets call it 10 watts) to consider if there is something other than population Ponzi it could reasonably do for itself as a socio economic model.

    Dr Liz Allen is a demographer at the ANU Centre for Social Research and Methods.

    There are some good reasons to support immigration but Liz isnt up to giving them to anyone…….

    • “It has been notable for being bereft any balance, perspective or attempt to engage with people who are either not in complete “agreement, or who may have a differing view.””

      You could say that about any “debate” in Australia.

      • C'est de la folieMEMBER

        Dude, I not only completely agree, but I have just found an article in another media outlet which runs to the core of Australia’s policy malaise across just about every facet of Australian policy that – subject to people shunting me large volumes of work from offshore to complete this evening, or subject to the possibility that I may consume so much alcohol I may pass out – I will try and write it up for a weekend thought provocation piece for the MB cognoscenti.

        • The Travelling PhantomMEMBER

          Please don’t consume so much alcohol, it might hurt your liver
          MB cares
          (like the old slogan of cbs cares if you remember)

    • TailorTrashMEMBER

      Hope you use your well oiled contacts to feed this
      into the fabric of the ANU ……make Liz squirm in the tea room or choke on a doughnut every time she hears a snigger at the next table …

    • Quoting Johnson to support an Australian perspective on this is fallacious. The UK is at a standstill with wholesale industrial declines because it has curtailed the movement of skilled people. See the pig and turkey farming.

  2. I am more are more impressed with Crikey given the shocking failures and bias of the corporate main stream media.
    reporting like this on a shocking story that is being ignored by the corporate media should encorage people to subscribe.

    Exposing Christian Porter’s donors is so scary Morrison will do anything to avoid it – Why are Christian Porter and Scott Morrison so desperate to cover up the identity of Porter’s donors? What power do they wield over the government sufficient it will do almost anything to protect them?
    https://www.crikey.com.au/2021/10/21/exposing-christian-porters-donors-scary-scott-morrison/

    • Mining BoganMEMBER

      $1000 for a pair of glorified dunlop volleys.

      They’re right, that’s absolutely disgusting.

    • reusachtigeMEMBER

      The real problem is that they have closed many public toilet blocks and aren’t opening new ones because of homos and pedos.

    • Reus's large MEMBER

      So the funniest thing about that article is that I have no idea who any of the “athletes” are aside from Kelly Slater, secondly, I am pretty sure that the “influencer” paid for that article given how much she is featured in it.

      People got to choose between the red pill and the blue pill, as hard as it may be the red is always the choice I will make.

  3. Hugh PavletichMEMBER

    New Zealand’s housing debacle: Why are Labour’s Woods and National’s Willis failing to explain the draconian proposed recession plane changes and the comprehensive costs of forced density ? …

    Would you accept this type of median density development around your property … see Fact Sheet excerpt below ?

    Discuss this with your building industry professional.

    Nicola Willis (selectively) opines in today’s Stuff …

    Nicola Willis: Let’s join forces to say yes to more housing … OPINION Nicola Willis … Stuff NZ

    https://www.stuff.co.nz/opinion/300436799/nicola-willis-lets-join-forces-to-say-yes-to-more-housing

    Watch the video below from 6.20 minutes in, for the concluding comments by the National Opposition Party Leader Judith Collins and the prepared and generally excellent (unlike Wood’s) presentation by its Housing Spokesperson Nicola Willis …

    Labour and National join forces for housing crisis fix, ending decades of standoff … Thomas Coughlan … New Zealand Herald

    https://www.nzherald.co.nz/nz/politics/labour-and-national-join-forces-for-housing-crisis-fix-ending-decades-of-standoff/Z27M7UF7QFO4RMLNR7UQBQERZI/

    … read and consider this document carefully …

    The Resource Management (Enabling Housing Supply and Other Matters) Amendment Bill … Final-fact-sheet-19-10-2021_0.pdf

    https://www.beehive.govt.nz/sites/default/files/2021-10/Final-fact-sheet-19-10-2021_0.pdf

    … just one example … have Woods and Willis discussed the proposed medium density recession plane changes … page 2 … ? …

    … Have Woods and Willis adequately explained the comprehensive costs of forced no zoning / covenants density development … and too … learnt from the Christchurch earthquakes (from a national security perspective too) , why low density low and light development coupled with a planner focus on restoring and maintaining acceptable levels of affordability and mobility (remember the wise advice of Alain Bertaud a few years ago when he visited NZ) are critically important ? …

    Higher urban densities associated with the worst housing affordability … Wendell Cox … Demographia / New Geography

    https://www.newgeography.com/content/007221-higher-urban-densities-associated-with-worst-housing-affordability

    There is an expectation in some quarters that densification of existing urban areas will lead to improved housing affordability. This argument is used to justify densification policies around the world. However, an examination housing affordability and the density of built-up urban areas corresponding to the 53 major US markets (metropolitan areas over 1,000,000 population) suggests just the opposite — that higher urban densities are associated with worse housing affordability, for both owners and renters….

    … Housing Affordability by Urban Density Major US Markets

    Housing affordability measures (median multiple) are indicated by urban population density in Figure 2. All urban density categories under 3,500 per square mile have median multiples of from 3.5 to 3.6, which indicates “moderately unaffordable” housing. From 3,500 density up, housing affordability drops sometimes, dramatically. Urban areas with densities from 3,500 to 4,499 per square mile have seriously unaffordable housing, at 4.9, while those from and 4,500 to 5,499 have “severely unaffordable” housing at 5.4. Urban areas with densities of 5,500 per square mile have even more severely unaffordable housing, at 8.8 (Note 2). This category includes Los Angeles, San Francisco, and San Jose. … read more via hyperlink above …

  4. Hugh PavletichMEMBER

    New Zealand housing: Bye bye bubble … which appears to have peaked June / July …

    … ‘It’s a 6 lane highway in to a market … and a goat track on the way out’ … quote Kyle Bass ( https://en.wikipedia.org/wiki/Kyle_Bass ) …

    Rising mortgage rates took the shine off price falls for many first home buyers in September … Greg Ninness … Interest Co NZ

    https://www.interest.co.nz/property/112837/rising-mortgage-rates-took-shine-price-falls-many-first-home-buyers-september

    It became slightly easier for aspiring first home buyers to be able to afford a home of their own in several parts of the country in September, as prices dipped at the bottom of the market.

    According to the Real Estate Institute of New Zealand, the national lower quartile selling price dropped $14,000 from $619,000 in August to $605,000 in September.

    The lower quartile price is the price point at which 25% of sales are below and 75% are above, representing the most affordable part of the market.

    The biggest lower quartile price decline was in Auckland where it dropped by $30,000, from $880,000 in August to $850,000 in September. This was followed by falls in Taranaki of $23,785, Manawatu/Whanganui of $15,870, a Northland drop of $15,000 and a fall in Wellington of $10,000. … read more via hyperlink above …

    … With residential building consents for August 2021 at 4,490 ( up from 3,156 August 2020 … a 42% lift ) … August 2021 annualized 53,880 … August 2021 consent rate 10.4 per 1,000 population per annum … about China’s annual production ( from The Economist 15 million units per annum ) … … population circa 1.440 billion … therefore China about 10.4 /1000 per annum too … with Australia about 80% of these populations based rates, Canada 60%, USA about 46% and Britain near 20% …

    New dwelling consents surge in August, particularly in Auckland and Canterbury … Greg Ninness … Interest Co NZ

    https://www.interest.co.nz/property/112507/new-dwelling-consents-surge-august-particularly-auckland-and-canterbury

    … Check Statistics NZ excel file via link below … specifically Tables 7 and 8 consents rate per 1000 population per annum.

    … Take particular note of Selwyn County adjoining Christchurch City to the south, where Selwyn County’s consent rate per 1000 population per annum for August was 27.7 … making the rest of New Zealand and China look like laggards at about 10.4 ! …

    Building consents issued: August 2021 … Statistics New Zealand

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

  5. https://www.medrxiv.org/content/10.1101/2021.09.28.21264262v1

    Abstract

    We found no significant difference in cycle threshold values between vaccinated and unvaccinated, asymptomatic and symptomatic groups infected with SARS-CoV-2 Delta. Given the substantial proportion of asymptomatic vaccine breakthrough cases with high viral levels, interventions, including masking and testing, should be considered for all in settings with elevated COVID-19 transmission.

    So it seems the entire debate is similar to that depicted in the movie Jaws and should the public beaches be opened or not for the holidays. Which in real life is sorta like the filming of the movie on the island and all the dramas surrounding the constant failures of the mechanical shark [no booming around] throwing all the scheduling into disarray. After an especially troublesome few days and near the end of the day the thing started working again, everyone was on walkie talkies and throughout the entire island you could hear the shout “its working its working” all across the island, a spontaneous cheer went up from one end to the other by all that could hear …