Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Asian share markets have slumped in the response to the whalloping on Wall Street from Friday night as inflation and growth concerns are being kicked around by aggressive rate rises from the central banks. The USD remains strong against all the undollars, with gap downs across the complex and stock futures looking troublesome for the European open as well. Oil prices are drifting sideways, with Brent crude still just above the $120USD per barrel level while gold is trying hard to hold on to its unusual Friday night gains, currently just above the $1860USD per ounce level:

Mainland Chinese share markets are the best of the bunch but still selling off with the Shanghai Composite closing down 1.1% to 3248 points while the Hang Seng Index was hammered, down nearly 3.6%, closing at 21102 points. Meanwhile Japanese stock markets had a similar steep pullback, with the Nikkei 225 index losing 3% to 26987 points while the USDJPY pair is holding on to its gains to remain well above the 134 level:

Australian stocks were closed today for a public holiday and are likely to crack well below the 6900 point level on the open tomorrow while a gap down in the Australian dollar below the 70 cent level was filled this afternoon, but the Pacific Peso is looking very weak here as weekly support has evaporated:

Eurostoxx and Wall Street futures have gapped some 2% lower this morning, with barely any recovery as we head into the European open with the S&P500 four hourly futures chart showing price crushed at the 3900 point level and meeting the May lows (lower horizontal black line). It could be another bath of blood tonight:

The economic calendar starts the week with UK yearly GDP figures then some Fed speeches to keep an ear out for.

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Comments

  1. The Travelling PhantomMEMBER

    Thank you Chris! Been a while didn’t thank your great efforts 👌 👏 👍

    • A fairly convincing demonstration that wholesale price caps don’t help anyone. The generators just refuse to bid at AEMO auctions and then other powers are used to force them to make the electricity anyway. I wonder if they get paid what they want or just the capped price? Whichever way, if this continues for any length of time, I imagine there’ll be a few power stations looking for new owners.

      • The Travelling PhantomMEMBER

        Then we’ll become like Venezuela, very rich in resources but no electricity 😕

      • drsmithyMEMBER

        “Company throws away phat profits because Government steps in to prevent them from earning FKN LOL profits.”

        • Who makes the FKN LOL profits, though? Is it the generators or the gas/coal suppliers? It’s been a long time since I had power companies as customers (and they weren’t the “vertically integrated” ones) and I just don’t know how the landscape may have changed since. Back then, the generators would have been as much the victims in this story as the retailers and end users; now, I just have NFI…

    • Didn’t China do something similar recently? I seem to recal Michael Pettit saying this can only result in rationing?

    • Not started yet. Need to finish the notice period here and then have some time off before starting.
      Stressful resigning too!

  2. haroldusMEMBER

    Well I put in some lettuce and kale seeds today into my Greensmart pots out the back (May Queen/Cos Verdi/Lollo Blondo and Nero Di Toscana). I’ll be a millionaire in a month.

    I’ll do coriander/basil/parsley/chives in the Urbipod tomorrow.

    And if I get time I’ll do broccoli and peas in the front pots.

    It’s never that successful here as none of the pots get enough sun tho.

      • haroldusMEMBER

        Actually if I had a bigger boat and I lived on board I’d probably think of something, but this one is 27 foot so space is at a premium.

        Worst comes to the worst I reckon you’d get a couple of quails and 20kg of alfalfa seed for greens and protein (quails are prolific layers).

        • Quails have very efficient energy conversion. Yes, prolific layers and very rich eggs. Plus quail eggs are superb for the truffled eggs in a jar gig, the very thin shell (tough membrane makes up for it) seems to help the transfer. Plus quails taste so good, cheep and cheerful Vietnamese five spice to elaborate [email protected], you can’t go wrong harry.

      • He’d have to restrict himself to sailing on fresh water. Kinda limiting in Australia.
        Canada, maybe, but I’m not sure about an Endeavour 24’s icebreaking capabilities…

    • The Travelling PhantomMEMBER

      What about watermelon? It reached $80 USD
      You’ll pass the smelly guy Musk in richness if you plant them!!

    • You know it’s bad, when APRA is no longer able to use lettuce leaves for law enforcement, they’ve had to use cabbage though even that’s on a “if absolutely needed” basis.

    • So the energy regulator had words and now all good, just fired up some gas peakers! Are the energy companies doing an Enron?

    • The Travelling PhantomMEMBER

      “To top that off, Covid-19 stimulus packages have ended, which provided a brief lifeline for the bad debts these companies were paying down — but no longer.”
      Lol the country was running on borrowed time

      • TailorTrashMEMBER

        Kind of like Greensill Capital…………when are people going to learn that you actually need to pay for any “service “ you engage with plus pay back the credit you were extended

        …………going to the butchers for the snags on 4 equal payments long after they have turned to sh1 t is not the smartest way to run your affairs…….or the affairs of some of these great hugely valued whizz bang business models

    • LOLs
      Getting customers who have been refused everywhere else & need a loan to buy a pizza are the first to fail. Hoocudanowd

  3. It’s all looking a bit calamitous out there this evening.
    The only thing I can think of to put a floor under the markets is if Volodymyr has a some pressure put on him to surrender.
    Absent a closure of The War, that is being blamed on everything; and even thought we know it’s not that, what else is there left that is going to stabilise the global uncertainty?

    • It’s not like the war is actually the cause of all these ructions. Look more to WuFlu closures and supply chain disruptions with a big dollop of resource depletion for the current problems. The coming northern winter is when we’ll really start to see the war caused shortages and famines kick in.
      Global uncertainty should stabilise around the time our species learns to live within our means.

    • The Traveling Wilbur

      Well Janet, as you mention it… you and me could wait a few more days for prices to meet reality and then backstop the market with our dry powder cumulative retirement savings.

      By that time, a couple of mill should cover controlling stakes in both Meta and Muskla.

      PS You’re providing most of the capital for this (between visits to all those muppets who second-guessed your sell-at-the-top move of course) btw. Happy to help as I can on this one. 😉

      • The Travelling PhantomMEMBER

        As the bond king of this realm, can you please explain what’s going on , they are expecting the Fed to hike 0.75% also New Zealand 10 year yield reached 4% for first time in nearly 10 years.
        Dose that mean a bigger hike coming in Oz
        Also if the Aussie banks in NZ suffer is it Aussie or Kiwi problem?

        • The Traveling Wilbur

          Anyone who ever tells you that they’re sure what a CB rate rise is going to be is lying.

          There are more rate rises coming, but not due to anything the RBNZ will ever do.

          And rate rises in NZ just give the Aus banks that own them NZ banks doing the raising the option of making even more margin on the way up than they did on the way down.

    • How the hell do LLs get away with this sh!t in NSW, tenant laws wouldn’t allow that in WA.

      • The Traveling Wilbur

        Inversion in US yields from 3yr on up (combined with massive DXY splurge) = not good.

        • The Travelling PhantomMEMBER

          Lol see above, I just posted a reply asking you 🤣 without knowing you posted here
          Thank you

  4. So it looks like the Libs are going to push ahead with Stamp Duty reform in NSW but the NSW ALP are going to oppose it. Seems it will come down to whether the new Federal Treasurer will allow some flexibility in GST allocations if NSW go through with it.

    Reading a number of the comment on the SMH website and you despair that anything will ever get done in this country again.

  5. The Traveling Wilbur

    Oh. Wow.

    In the last minute of trade this morning (0559) the ASX-200 futures went UP 100 points on investing.com. I assumed someone forgot Aus wasn’t trading today. LOL. But apparently this just never happened:

    https://investing.com/indices/australia-200-futures-chart

    So someone out there has even stronger 1984 skills than even DLS could possibly imagine. Should have taken a screenshot for my MB collection.

    • The Travelling PhantomMEMBER

      DLS been weird recently pushing for higher house prices…you knew him longer than any of us…was he always house bull?

      • Not a housing bull, an anti depression bull. We all know the consequences of a collapse.

  6. My dilemma is, what to do with super? Do I sell out of equities/ETFs and go cash mainly? Or is it too late? On the other hand, with high inflation cash is bound to become worthless…

    • When do you retire? 5-10 years or longer? I see no point trying to time the peak / low and rather just hold. I’ve paid in $12k+ this year, yet still down 5% compared with last years balance. But I am hardly worried. I don’t plan to retire for 30+ years anyway.

      • But things will collapse in the mean time – my guess 20-30% lower from here, maybe more. So why chase it down? What I did in September 2021 was cash 100%, so super falls a lot less (relative to inflation). Expect to maybe get back in when the dust settles. 1-2 years from now, I’ll see. Then ride it up again.

        *If CB’s open spigots again, I’m also back in.

  7. What we’ll see after the depression and wars over the next few years, is a generational shift away from profligacy toward an asceticism feeding from and into an asset price collapse and food inflation. Everyone will know someone who has gone bankrupt on property. And they will realise it was the boomers multi-decade version of a crypto scam.

    • Ronin8317MEMBER

      Crypto solves one problem : how to make payment untraceable for illegal activities like kidnapping and blackmail.

  8. Hugh PavletichMEMBER

    New Zealand …

    Borders open: More people leaving New Zealand than entering … Brianna McIlraith … Stuff New Zealand

    https://www.stuff.co.nz/business/128947550/borders-open-more-people-leaving-new-zealand-than-entering

    More people are leaving the country than entering, with departures the highest since February 2020, data from Stats NZ shows.

    In total, 97,093 New Zealanders departed overseas in April.

    Tourists arrived, but in smaller numbers. There were 54,303 tourists in April, equal to about 18% of tourist arrivals in pre-pandemic April 2019. … read more via hyperlink above …