Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

A mixed session here in Asia for risk takers as most of the big stock markets are closed still with the dominating catalyst for the day being the once in a decade rate rise by the RBA, which lead to some oscillation in stock prices but put a light underneath the Australian dollar. Even still, the USD remains super strong against all the majors with Euro and Pound Sterling still under a lot of pressure. Oil markets are steady with Brent crude still indicating a $107USD per barrel level price while gold is slipping again after its big falls overnight, currently at the $1861USD per ounce level, as daily momentum remains highly negative:

Mainland Chinese share markets were closed again for a holiday while the Hang Seng Index put in a scratch session to finish just 0.2% higher at 21128 points. Japanese stock markets were also closed for yet another holiday while the USDJPY pair is reflected that lack of action with a symmetrical triangle pattern on the four hourly chart showing no direction, albeit with a bullish bias as it hovers above the 130 level:

Australian stocks went down and then recovered most of that turn on the back of the RBA rate rise with the ASX200 still losing around 0.25% to finish at 7328 points. Meanwhile the Australian dollar surged after a morning 50 pip rally off of the 70 handle, then retraced most of that move to be around the 70.90 level before again picking up pace later this afternoon as the hourly chart shows.  The target in this move – before the Federal Reserve kicks all of this down again – is the previous weekly high around the 71.70 level (upper horizontal black line):

Eurostoxx and Wall Street futures are inching higher with the S&P500 four hourly chart showing price wanting to get out of this bottom pattern with the potential to breakout above the high moving average at around the 4200 point level, but its very very early days yet:

The economic calendar is very busy today following the RBA meeting, we’ve got German unemployment then a speech by ECB President Lagarde then US factory orders.

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Comments

  1. The Travelling PhantomMEMBER

    Thank you Chris! You were missed yesterday.. but Not-Gunna came to the rescue.

  2. The Travelling PhantomMEMBER

    How good is the Australian economy! We are increasing rates for first time in 10 years and scomo is so upset about it and blaming the world for it!

    • dennisMEMBER

      lolol they have a new position on IRs now; normalisation, it’s all normal! Don’t know why they didn’t say that before, I guess they hadn’t come up with that lie then.

    • Absolute BeachMEMBER

      The strong USD is possibly the wrecking ball that knocks down an already shaky world economy. It’s smashing EM’s purchasing power and creating debt exposures for borrowers in USD (corporate and state) world wide. I think Brent Johnson’s milk shake theory looks about to be proven correct. Demand for USD goes up at the same time Fed puts rates up- which is bad. And the Fed can’t go full reverse when inflation is going up. So the debtor nations must raise interest rates to prevent capital flight but this further crunches cash in the broad economy(s).
      Are we are about to see a world wide recession? I hope not, but would not be surprised.

  3. The sky is falling!! The sky is falling!!

    Jesus Christ! The last time interest rates went up Robin Williams, Osama Bin Laden, Gadaffi, Kim Jong-il, Steve Jobs and Amy Winehouse were still alive. Japan had not been hit by massive earthquakes and nobody knew where Fukushima was. The Greek default was in the future, Julian Assange was still a free man and Charlie goddamn Sheen was still on Two and a Half Men. Prince William was single and the Chilean Miners had just been rescued the month before.

    Keeping interest rates so low for soooo looong is the definition of delusional, and has been instrumental in setting this country on the dark trajectory it is now following.

    And today they went up ZERO point two five percent.

    I mean just….wow. The sheer chutzpah is breathtaking.

  4. Perhaps many here don’t understand this, but the RBA knows what’s coming (wether rates rise or not)

    What they want is ammunition (rate cuts) for when the SHTF.

    Because you can’t cut rates from ZIRP.

    Hence.

  5. TailorTrashMEMBER

    Phil Lowe is 60 years old ……and tonight on telly
    he is sporting a fine head of blonde hair ………is this an indicator for this wonderful strayan economy ?

      • happy valleyMEMBER

        Nah – all likely going to NIM, profit and bigger bonuses for the bosses to help them cope with cost of living inflation (the cost of their toys, luxury lifestyle etc). Screw depositors forever the likely message – if they’re stupid enough to have money in our “unquestionably strong” banks.

    • The Travelling PhantomMEMBER

      The same CBA that said RBA won’t rise till June??
      Hypocrites!!

  6. ErmingtonPlumbingMEMBER

    I like a lot of the Greens policy platforms. Especially their health and education stuff and putting dental on Medicare is a real vote winner.
    But they seem to hate middle aged males (the wh!te ones in particular) like me.
    I mean would they have selected Claire Garton as a candidate for Morton if she hadn’t transitioned to a woman?
    https://greens.org.au/qld/person/claire-garton

  7. JumpingmanjimMEMBER

    Reserve Bank cash daddy Philip Lowe has locked his office door this morning and put a sock over the smoke detector because today is the beginning of the end of the Australian Dream, as some pundits are saying.

    In addition to smoking inside his Martin Place Office, the Reserve Bank Governor is also blearing Guns N Roses classic ‘Welcome To The Jungle’ at an obnoxious level.

    Shortly before speaking to The Advocate via telephone, Lowe allegedly threw a stapler at his executive assistant after he gained entry to the office.

    “This is it, boys,” yelled Lowe over the ripping Slash guitar solo.

    “You’re about to experience your first rate rise in 11 years! Woooooooo! The Prime Minister will never forgive me and guess what, motherf**kers, I don’t give a f**k!”

    https://www.betootaadvocate.com/advocate-in-focus/rba-governor-philip-lowe-pumps-welcome-to-the-jungle-and-lights-up-a-durrie-as-rate-rise-apocalypse-begins/