Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Following last night’s US inflation print, shockwaves continue to spread around currency and bond markets, with Asian stock markets caught up somewhat as the USD surges against undollar assets and local shares battered due to a higher than expected unemployment print. Gold remains strong as it consolidates at the $1850USD per ounce level while Bitcoin and other crypto tulips had a sudden inversion earlier in the day with a retracement back to the start of week position below the $65K level:

Chinese shares are surging, building on the previous sessions late bounceback with the Shanghai Composite up more than 1%, currently at 3532 points while the Hang Seng Index is taking a half step, up 0.5% as it climbs back above the 25000 point level, now at 25127 points. Japanese markets are also lifting higher, all due to a lower Yen, with the Nikkei 225 closing 0.5% higher at 29277 points as the USDJPY pair builds slightly on its big lift overnight, hovering just below the 114 level as it faces a very strong resistance level at 114.30 or so:

Australian stocks are the worst in the region, not helped by a diving AUD with the ASX200 closing more than 0.5% lower at 7423 points while the Australian dollar has caught up from other oversold undollar assets following the “surprise” US inflation print, now battling to hold abvoe the 73 handle here:

Eurostoxx and S&P futures continue to look weak as we head into the London session with the four hourly chart of the S&P500 showing price retracing below short term ATR support that had held throughout this buying frenzy, but note that long tail of buying support just above the 4600 point level that is likely to show the BTFD crowd where to step in:

The economic calendar includes the UK GDP and trade balance figures, then some major projections from the ECB with most US markets closed for Veteran’s Day.

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Comments

  1. Hugh PavletichMEMBER

    New Zealand housing supply: Surplus on horizon …

    … Building out of the bubble … fast …

    House prices, sales rise in spring resurgence … Miriam Bell … Stuff NZ

    https://www.stuff.co.nz/life-style/homed/real-estate/126951013/house-prices-sales-rise-in-spring-resurgence

    https://reinz.co.nz/residential-property-data-gallery

    Paulson (Pavletich) comments on thread …

    Check Stats NZ latest building consents for the months of August and September … annualize them … and note that the consent rate per 1000 residents per annum (standard industry measure internationally) is now a whopping 10.4 … with Selwyn County a stratospheric 27.7, near a world record.

    Residential consents ramped up about 24% over the past 12 months. (access … Building consents issued: September 2021 … Statistics NZ )

    On a population comparison basis, it is likely New Zealand is currently the world leader at residential consenting … with Aust about 80% of our figure, Canada 60%, USA 46% and the Brits about 25% of us.

    It won’t be long before we exceed New Zealand’s national record during the time of the Kirk Labour government of 13.4 (December 1973 year) when the bubble popped and in inflation adjusted terms prices came back then about 40%. (access … Rise in new homes consented per 1,000 residents … Statistics New Zealand )

    We have a much bigger inflation mess to sort out now. … read further comments on thread via hyperlink above …

    ASB economists say Auckland’s housing shortfall will drop to ‘zero’ by late next year … David Hargreaves … Interest Co NZ

    https://www.interest.co.nz/property/113161/nzs-extremely-high-current-levels-housing-constructon-cannot-be-sustained-without

    … In case you missed it … an outstanding broad overview by independent economist Tony Alexander …

    NZ home loan rates going to continue to grow – economist … TVOne / TVNZ

    https://www.1news.co.nz/2021/11/02/nz-home-loan-rates-going-to-continue-to-grow-economist/

    • bridie schmidt
      Bridie Schmidt

      Bridie Schmidt is lead reporter for The Driven, sister site of Renew Economy. She has been writing about electric vehicles since 2018, and has a keen interest in the role that zero-emissions transport has to play in sustainability. She has participated in podcasts such as Download This Show with Marc Fennell and Shirtloads of Science with Karl Kruszelnicki and is co-organiser of the Northern Rivers Electric Vehicle Forum. Bridie also owns a Tesla Model 3 and has it available for hire on evee.com.au.

          • Mining BoganMEMBER

            You make no sense. What does a bio of a journalist have to do with people going large on Rivian?

          • Again what is this stuff about people going large about – ???? – are you suggesting this is some broad investor sediment based on fundamentals

          • Mining BoganMEMBER

            You’re dribbling again sunshine, I’m asking why people have gone in so big on an IPO like this and you quote a journalist’s bio.

            What colour is the sky in your world?

          • And I asking you what you think constitutes these people and further more if you don’t understand how IPOs are front run and managed for a few thats your drama.

          • Hows that sharing gig worker plan coming along, uber make any money yet, but investors[tm] keep dog piling in anyway.

            What … you saying the rational agent model is not functioning properly …

          • The Traveling Wilbur πŸ™‰πŸ™ˆπŸ™Š

            Uber reported negative net income of over 6.7 billion U.S. dollars in 2020

        • E-commerce giant Amazon is in the picture with its own roughly 19% stake in Rivian, which has electric package-delivery vans on its drawing boards. Rivian lost $2 billion in the first half of this year. But the new backing will help it expand manufacturing and the projected launch of an all-electric parcel van by the end of the year could change the financial picture.

    • The Traveling Wilbur πŸ™‰πŸ™ˆπŸ™Š

      At this point in the product development cycle all it has to do is not catch fire spontaneously and be no worse than a little-bit-worse than tesla.

  2. So during the 2008 GFC, Australia was sitting at 6.5% interest rates with a private debt-to-gdp of 200% ( that hasnt changed much ) .

    Today, we are sitting at interest rates of 0.1% ( practically zero ) with 211% debt-to-gdp.

    Thats a great position to be in to go into a crash.

    QE… definitely… QE… but man, thats gonna be a lot of QE. Australias Debt Levels are going to skyrocket into the stratosphere.

    The AUDUSD is going to be sooo faaaar*ed.

    Boomers will have Pension Envy – https://www.youtube.com/watch?v=3RQvBr3YDo8

    So exciting. Im loving this stuff. Bring it πŸ™‚

    • darklydrawlMEMBER

      I was explaining this to someone tonight by saying that the 2008 GFC was like being at a party and you’re starting to get sloppy. Dribbling your drinks, slurring, bumping into stuff. Rather than sobering up a bit and trying to recover, you decide the best plan of action is to double down hard and keep the party going. Now it’s 2021 (about 06:30 AM in party land) and a monster spew and massive hangover is coming (and won’t stop for hours once it gets started). I feel that is about where we are at right now.

      • The Traveling Wilbur πŸ™‰πŸ™ˆπŸ™Š

        That’s what happens when sh1ttatds like you and I borrow money for a house and then can’t pay it back.

        When it’s governments and ventral banks carrying the can, everything is awesome. Until it’s not.

        This is the first time in the history of ever for this one. It’ll either be fine, or reality will make bcnich’s predictions look like a Teddy Bears’ picnic.

      • Well, interest rates wont be going up anytime soon. Not from what I can tell.

        If Labor wins the next election then I can only assume they’ll be Migrating / Printing like crazy to keep all of this alive. From what Im seeing, both Lib/Lab are scared sh*tless of negative interest rates so my guess is they’ll do everything in there power to avoid that at all costs. That will only lead us into Hyper-Inflation that will diminish the power of the currency. It’ll translate into price rises throughout Australia on most common goods / items and your money wont seem to go as far. The purchasing power of your money will weaken. That will be devastating for anyone with savings in a bank account or who’s holding superannuation.

        The scary thing is in my view, I do not believe this is the end. Sure, this will be a ‘yet another devastating economic shock’ for Australia but if in my belief, we have another 17 years of this coming. Once crashed we stay that way until the next crash hits.

        Its not a currency problem… its a demographics problem. The only way this gets solved is if we murder off all the Boomers πŸ™‚

        Australia has a Social Crisis. 50 years of social inequality and corruption has pushed so much hardship onto todays young that they are essentially ineffective. We are wasting time. Soon, we will have 50 year olds expecting to be where 30 year olds used to be. Not only has education been destroyed ( for health care ) but the young have effectively put there entire lives on hold for this stuff. The young arent ‘Living Life’. There entire lives are being held back. The financial pressures of the Boomers pushing down on the young see’s Australia with a society that has many retirees but not enough young workforce to fund it. Add in Covid and all the future changes coming ( China ), and you have a recipe for disaster. We’ve gouged the young so badly that there’s really no future for any of them.

        I think in time, lack of money will see deaths happen regardless. You can argue over who gets what… but when there is no money to argue over… I can see people dying from lack of money.

        Depending on the attitudes of the Boomers and Politicians will depend on priorities. If the past 15 years is anything to go by, then we will be keeping the already dead Elderly alive at the expense of the Young of Tommorrow. The funny thing is that the more young we kill, the less money we have, the more Boomers will inevidably have to die. Its going to be hilarious watching them murder themselves.

        As money begins to break down, you will see what Satjadit Das describes as ‘ The End of Trust ‘. People will guard there wealth like crazy which will divide society even further. Relationships will break down. People will become very protectionist and very triablist. You’ll see spiking Divorce Rates, less marriages and all kinds of stuff happening. Socially, people will be more focused on ‘Living Life’ then any of that stuff. Birth Rates will fall even lower. Marriage rates will fall as Men become less interested in Marriages.

        At the obscure end, Men who leave there homes will discover relationships are a pain in the a$$. Pretty much everyone you speak to will either want something, manipulate you or be trying to sell you. This will be an end result of the fact everyones broke and life circumstances are so hard. Men will start to innately feel the need to ‘not socialise anymore’ because whats the point? Everyone wants something so why bother? They’ll pull out of marriages. A loneliness pandemic will come along as men choose to ignore people generally because ‘they only just want stuff’. Not only will you see the rise of Tribalism ( Gangs ) but also the rise of Hermits. Men will find its just easier to ignore people, live by themselves and not having anything to do with anybody. They will have less interest in woman and more interest in ‘Living there own Life’. Thats when you’ll see a rise of what Japan calls Hikomori ( Shut Ins ).

        But nobody cares about the social stuff. Just a pet interest. Im sure that couldnt happen in Australia?

        I must be a saddist. Im loving this stuff πŸ™‚ I’ve never been so excited. This is so much better then s*x.

        • Young people should invest money in Crypto like $BTC because it’s a way for young people to opt out of the currency financial system and forced older generations to buy in, which could reverse the wealth transfer of the last 20 years in the opposite direction.

          Don’t worry people will still get married and have s3x.

      • Yeah well when some mangle loanable funds theory into “Natrural” interest rates lots of stoopid happens …

      • The Travelling PhantomMEMBER

        They don’t know the horse 🐎 they are looking at “closely”
        Has bolted ages ago!

        • The Travelling PhantomMEMBER

          It’s quite an amusing government department. They should include managing the comedy festival in their charter

    • i wonder if APRA are worried they might have let things run too hard given risks from inflation and higher interest rates. Are they going to take further action to minimise the size of problems for the banks down the line from irresponsible bank lending?

      The word that comes to mind is – procyclical…

      • The Travelling PhantomMEMBER

        True and interesting angle, I haven’t thought about it this way. What do you reckon?

        • APRA’s job is to protect the banks… including from themselves.
          Interest rates rising faster than expected could expose some problematic lending and be unhelpful from a financial stability perspective.
          APRA will want to make sure the banks are not indulging in excessively shonky lending just before interest rates go up.

    • TailorTrashMEMBER

      I say steady on chaps ….

      let’s not be hasty ….

      …..shouldn’t the tea cart with the iced VoVos
      be along shortly ? …

  3. Pro tip- even after a coat of taubmans 3 in 1 prep then a coat of Dulux weather shield do not put LVLs up in humid weather preceding rain

    Pro tip – oil paint the top chord first. Liberally. After siliconning or T-Rexing every bloody hole

    Just managed to get tarps up and battened down on an 75sqm carport roof frame in near dark

    Fml

    • The Travelling PhantomMEMBER

      Are you getting the storm tonight or tomorrow in Northern NSW? massive floods expected?

      • Dodged most of it I think. It slid away to the west or north east offshore.

        A bit today but fine next few days so can get the tarps off, battens for iron, let it all dry out then re-tarp for next week’s rain which will just beat my roofers to the job. Never a dull moment.

        It’s a pity you can’t get f27 hardwood to span 7.5m.

    • The Traveling Wilbur πŸ™‰πŸ™ˆπŸ™Š

      Excellent job on the tarp.

      Regarding your other observations: never lay wood until you’ve had it hanging around where it’s going to go for at least a few weeks. A month, in summer, is optimal.

      Does apply to LVL too. Somewhat.
      And to anything else you want to walk all over forever afterwards (which you’ll be able to if you did it right the first time).

    • TailorTrashMEMBER

      Heard some Chinese lady expert ( not Reusa’s
      sort of expertise ) from the ANU on the ABC today …spruking Keatingesque phrases ….”.seculity flom Asia
      not seculity in Asia β€œ.

      • We’re very secure in Asia. If you don’t include China.

        Was going to have a go at Keating in the reddit battles today, had lots of savage take-downs ready to go, but in the end it just didn’t feel right. He’s too…look, lets just say, watching that Press Club address made me feel younger than I have in years. Quite the achievement.

        So I just mocked the China apologists instead. Can’t tell if some are wumao’s trained in Oz or just badly misguided locals. That’s how misguided. Can’t tell if they’re Chinese nationalists who get paid to inhabit our internet fora or not. Even some of the hard core lefties were taking them apart.

        Kowtowing is a complete non-starter. Anyone who suggests it openly is trashing their reputation.

  4. I like end of year trading. All the big bankers and financial people go on holidays… so markets get quieter and more stable. Currency Markets become less volatile, more contiguous trends so you tend to make money a lot easier.

    Who cares about Christmas? I dont. Christmas is for woman and there children. I’d rather do whats best for me, trade markets and make money ;p

    Looks like there’s going to be some fun Currency Trading coming up on the horizon. Miserable for everyone else… but Fun for me.

    Australias a Beautiful place. Pitty about the people ( some are alright but most you dont want to know ).

    • The Travelling PhantomMEMBER

      Hey, I care for you bro, come over for Xmas lunch if you like. I’m planning to slaughter a cow to feed the multitudes. I hope you don’t mind coming to Victoria

      • Cheers Travelling Phantom.

        You shocked me on that one. Between the daily attacks from Boomers on my person and the judgements on my sexuality ( mostly from the rightly religious ), I dont receive comments like that very often.

        I went out for them Christmas Carols things a few years back. Woman and Kids everywhere. It really wasnt my scene. A few of the single mums tried chatting me up but I didnt have the patience for it. I’ve always preferred to be out with the boys. All go bush, surf or whatever. Mates are fun. I find woman to be drama. I’ll probably organise something at some point.

        I appreciate it man.

    • So if the Government takes a massive budget hit next year ( aka runs out of money )… then what do you suppose is going to happen to all these Health Care Workers ( Im presuming mostly a female workforce ) ?
      https://gyazo.com/a6bd359b032bf3d88fb95c468ac0421f

      Its nor wonder woman are so cocky these days. I guess when the money runs out for them, they’ll come crawling up mens a$$es and try to steal there’s ( if the men will have them lol ).

      Im thinking there’s a lot of unemployed females at some point on the this horizon.