Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

A very poor start to the trading week for Asian stock markets with concerns over Chinese inflation and the ongoing COVID lockdowns not helping risk sentiment at all, combined with increased tensions in Europe while the Fed seems hell bent on raising rates sharply. The Australian dollar has rejoined its downtrend, now approaching the 74 cent versus USD, while Yen is selling off extremely sharply as the USD remains strong against the other major currency pairs, particularly Euro. Oil markets are looking weak again with Brent crude breaking just below the critical $100USD per barrel level while gold is largely unchanged from its Friday night breakout. Bitcoin has once again deflated down to daily support, currently anchored at the $42 level and looking to break for a new monthly low:

Mainland Chinese share markets are unsettled given the ongoing COVID domestic problems, with the Shanghai Composite closing 2.6% lower to 3167 points while the Hang Seng Index has slumped 3.1% to 21189 points. Japanese stock markets are also very unsteady with the Nikkei 225 closing some 0.6% lower to 26821 points while the USDJPY pair is soaring higher once again, this time pushing right through the 125 level and clearing out the March high in the process:

Australian stocks again were the outperformers in the region but that’s not saying much with the ASX200 closing just 0.1% higher to remain shy of the 7500 point level, while the Australian dollar has continued its fall, now heading towards the  73 handle as selling continues in the wake of a Chinese slowdown:

Eurostoxx and Wall Street futures are slowly drifting lower with the S&P500 four hourly chart showing how the previous bounce up to the 4500 point level has retraced back down to weekly support with momentum not indicating upside potential yet:

The economic calendar starts the trading week with UK GDP, a slew of Fed speeches and several Treasury auctions.

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Comments

  1. The Travelling PhantomMEMBER

    Good start by Albo making good impression on voters, making a mistake then owning it
    I still don’t know how he didn’t recall the lowest interest rate in history by RBA

    • Something really strange is going on here. How could he not at least know that it started with a 4. This has been one of Scomo’s talking points for weeks. And to not know the cash rate which is at an historic level unchanged for 18 months…. What the actual F…
      Is there some sort of advanced next level reverse psychology game plan here or has he completely lost the plot? Very odd.

    • innocent bystander

      he is just trying to prove he really is the underdog.
      this could end up closer than we think – not that it will be much different whoever gets in; worse and worser – unless the independents hold the balance.

    • He could just have been flustered but it really does play into the Liberal party narrative that Labor are not good economic managers. Despite the massive debt ScoMo and co. have wracked up.

    • boomengineeringMEMBER

      Another client I’ve been in close contact with has Covid. Everyone seems to be getting it.

      • The Travelling PhantomMEMBER

        Same here, I’ve mixed with so many got diagnosed with it, and been to many sites and buildings to check their lifts and still covid free.
        However I don’t wish to have it or anyone else to have it too

      • Covid has obviously heard of my rep! I had a co-worker at the very start get it and now the 2nd person I know (extended family) tested +ve last week, 2+ yrs and 2 people!

    • TRADINGtheAPOCALYPSE

      Anyone dumb enough to drink bleach to cure Covid, should be allowed to drink it.

    • The Travelling PhantomMEMBER

      Also bogged down by Boris.

      What’s your analysis of the bond market in the US of A
      Is it pricing recession?

      • Bonds are no longer the same things they were…………since the seizure of Russian reserves they are now simply fiat with a coupon attached……I mean they always were but you could pretend otherwise……..not so now.

        Old measures for bond values don’t really apply anymore and if the QT is going to be as big and fast as reported there are shocks ahead. It is a brave new world and sovereign risk is much higher going forwards as well. I don’t think the bond market moves to the old tunes any more. Best to hope for is that the interest rate rises come thick and fast otherwise the bond market is going to be a lonely place.

    • The Travelling PhantomMEMBER

      Congratulations! Wish you Many more years to you in your glorious farm with loved ones.
      Nice selection of drinks 👌 👏 👍

      • Difficult to say. They are all superb whiskey/whiskys. For me, probably the Oban. The missus liked the Tullamore. The mate from Sydney liked the Ballantine’s.

      • I was completely burnt out after working at a big Silicon Valley company for 12+ years. Now though I’m kind of ok with the industry again. It all depends on who you work for and what you do.

        I really wanted to work on cars to do something physical but now that I’m a family man, IT works better for me as I’m home and can work in my office plus I don’t get grease and crap all over me. Which is fine with my own cars, less so for customers. Bottom line is, there are worse career paths.

        Although being a farmer is always something I’ve thought about. Being self sufficient and having a useful survival skillset etc..

    • Nice work. Ardbeg, For the Win.

      In fact, you’ve inspired me to have a dram myself.

      Cheers.

    • Good segment that, I really wish Nato had more balls and decided to declare no fly zone over Ukraine.

      • The plot is always the same. Our diplomats speak loftily of self-determination, civil liberties, and democracy. Then the local population does something daft, like attempting to nationalize their own oil or copper reserves or voting for a nationalist or socialist, at which point the CIA is forced to intervene and install a responsible leader like the Shah, Pinochet, or Suharto. If the new U.S-friendly leader hangs on, he or she over time becomes increasingly dependent on arms, “security advisors,” and World Bank/I.M.F. loans, mass-disappearing dissidents into fingernail factories or wiping them out with death squads, while also often raiding the treasury as a carrying charge for services rendered. This results in more domestic fury, leading to more calls for “aid,” until the by-now-hated U.S.-allied figure is steamrolled by a nationalist/communist/fundamentalist movement 1,000 times more hostile to the U.S. than anything that existed previously. See: Iran, Iraq, Afghanistan, and today’s Russia (hold that thought).

        https://taibbi.substack.com/p/regime-change-doesnt-work-you-morons

        BTW gave take the time to challenge your retrospectives with Scott Ritter et al that don’t belong to the whole new American century R2P neocon MIC pogrom.

    • It’s all relative! In ’95 my rate was 8+. Btw I can’t stand the man; I look forward to reading his obituary.

  2. Since election season season has started here’s something from the last one. This is the Bill Shorten Q&A. One hour and fifteen minutes of a capable person capably answering questions about policy out forward by their party. And yet the nation was sold Morrison and the LNP as the more capable group. All the same nonsense from the same groups will do the same rounds this time. It may work again. Still, this was the alternative and we collectively decided to stick with the LNP.

    https://youtu.be/Vx8aLG0AvO0

    • The Travelling PhantomMEMBER

      Imagine if Shorten was the PM during the fires, covid , Ukraine war and the Solomon Cuban missiles….

    • footsore, I don’t agree voters were “sold” anything. I think more like cognitive dissonance; no one wanted to give up their tax protected housing price rise racket or give up their bs franking credit / super rorts. Pure self-interest, no, greed is more appropriate. And those who weren’t in it wanted the opportunity down the track.

      • I don’t disagree about the power of self interest. I just don’t think that it was fair fight. Morrison was wasn’t focussed upon in any critical way while Shorten and his policies were intentionally shown in a bad light.

        It was always going to be a hard sell for Labor. They took in reforms undoing bad yet generous policies of the past. And we’d been getting all we wanted whenever we wanted since Howard. And we knew we deserved all of it. Coming in and saying it’s time to out the toys away was never going to go down well.

    • I’ve just watched the first 20 min of that and it’s no wonder Morrison declined Q&A’s offer, he wouldn’t have lasted 5 min let alone over an hour.

      Never understood peoples attitude to Shorten and have never understood peoples preoccupation with charisma. I think we missed the boat on getting Morrison in many, many ways.

  3. Goldstandard1MEMBER

    Jesus, seriously can Labor just at least give it the “Weekend at Bernies” and win. Stop talking!

  4. Day 1 of active journalism. Tedious stitch up questions to Albo.
    Couple of questions you won’t see journalism ask Sco Mo:
    How much did job keeper cost?
    What was the price of RAT tests in Jan-22?
    What fraction of government debt was borrowed by the LNP?

  5. Question journos can ask Albo

    What did Cameron smith shoot across amen corner

    Nope?

    Gotcha

    Jeez that was a horror show. Drop the triple and the bookend bogeys round 1 and he’s just about wearing the jacket

    Inconsistency

    Reminded me of 1996

    • Arthur Schopenhauer

      Complete media blackout for 6 weeks. That’ll make the lead up to the election 🗳 a joy.

      40 days to go… It’s a bit like Lent!

  6. I don’t disagree about the power of self interest. I just don’t think that it was fair fight. Morrison was wasn’t focussed upon in any critical way while Shorten and his policies were intentionally shown in a bad light.

    It was always going to be a hard sell for Labor. They took in reforms undoing bad yet generous policies of the past. And we’d been getting all we wanted whenever we wanted since Howard. And we knew we deserved all of it. Coming in and saying it’s time to out the toys away was never going to go down well.