Macro Afternoon

By in Australian Dollar, Australian Shares

| 116 comments

See the latest Australian dollar analysis here:

Macro Afternoon

Asian share markets continue their slump as local stocks play catchup, putting two days of selling into one session that has many spooked. The USD remains strong against all the undollars, with gap downs across the complex although stock futures are stabilising going into the European open. Oil prices are drifting slightly higher as tensions in Libya mean well shutdowns, with Brent crude still well above the $120USD per barrel level while gold is trying hard to fightback after a big move lower overnight, currently just above the $1830USD per ounce level:

Mainland Chinese share markets are the best of the bunch with the Shanghai Composite only down a handful of points to 3254 while the Hang Seng Index actually gained ground, up 0.1% to close at 21018 points. Meanwhile Japanese stock markets had a sizeable pullback, with the Nikkei 225 index losing 1.3% to 26629 points while the USDJPY pair is holding on to its gains to remain well above the 134 level:

Australian stocks were the wurst of course, down more than 4.5% at one point on the ASX200 before eventually closing some 3.5% lower at 6686 points as it played catchup to other correlated risk markets. The Australian dollar has tried to bounce back up to the 70 cent level this afternoon, but the Pacific Peso is looking very weak here as weekly support has evaporated:

Eurostoxx and Wall Street futures are coming back slowly with the latter showing a nascent sign of bottoming after last night’s big selloff. The S&P500 four hourly futures chart shows price action still crushed well below the 3900 point level and the May lows (lower horizontal black line) as a swing play may give some hope here:

The economic calendar has a busy night with German inflation, UK unemployment, the closely watched German ZEW Survey then the US PPI print.

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Comments

    • LeMon3MEMBER

      Do they still use laptop batteries?
      I’m on Pylontech LiFePO4. Reliable? Ask me in ten years…

      • The Travelling PhantomMEMBER

        There was a guy with knowIdea handle who i thought might have impersonated you for a second

        • LeMon3MEMBER

          Hmmm, missed that altogether. Bit busy on the weekend – the paddocks have finally dried out enough that I can get some work done around the place. It’ll take six months to catch up on the last six months of mud enforced laziness…

        • LeMon3MEMBER

          And, yes, I’m keeping the old batteries. They’re my insurance in the event charge controllers and inverters fail and can’t be replaced, as they can be charged without all that electronic [email protected], provide you don’t want to do anything other than run a few DC loads – fridge and lighting and stuff…

          • The Travelling PhantomMEMBER

            Tã ! So that guy did impersonate you ! As he answered not just my question but other people’s questions to you
            Lol all good 👍 👌

    • desmodromicMEMBER

      Arthur, rather than installing a battery (expensive), I’m about to install a Solahart Powerstore https://www.solahart.com.au/products/battery-storage/solahart-powerstore/
      We have a 7.92 kW solar system that should provide for most of our power needs but we still have an off-peak electric water heater that doesn’t use the solar. Changing to the Powerstore will enable us to use solar for hot water while still optimising power usage and exporting the excess to the grid. With the SA government rebate installation is under $3000 for a 300 litre unit. For us, a much better option to a battery costing $10-12K.

    • PlanetraderMEMBER

      Yes we did in 2017 when we did our reno – just got in for the series 2 13.2Kwh and we only paid about $6k at the time so I thought why not. Works well in Winter as we seem to have battery left over in morning when you get fine sunny days.
      We live in QLD. We have a gas fireplace and rarely use the heating. Our heating/air conditioner is a big unit and would suck the battery dry in 2 hours so without that going we would be ok.

      • Arthur Schopenhauer

        Thanks PT. We’re just about to do a renno and I’m looking at options. We’re in Melbourne, but there still looks to be enough solar access for a battery.

        Thinking about hydronic heating, but not sure it’s worth the cost.

        Heating is the big problem.

    • Diogenes the CynicMEMBER

      I’ve got an LG-chem 10 units but a mate has the Powerwall with 13? kW/hrs. He seems very happy with it.

    • drsmithyMEMBER

      Probably worth hanging around. Throwing the Mates some easy $$$ with home battery subsidies seems like an obvious half-arsed solution to escalating power bills.

    • Jabba

      We have one we installed in Jan 19. Hasn’t missed a beat in that time. We live in an area that gets quite a few small outages. I love that you don’t even know about them now until the battery sends a message saying mains power has been restored.

        • Frostilicus

          Read that as ‘Arresting and executing the CEO’ and was already looking up at buying tickets to that electrifying show!

          • ErmingtonPlumbingMEMBER

            To be effective you’d need to include the ALL major shareholders who are after all the major beneficiaries of this Thieving and thus primarily responsible.

    • RomulusMEMBER

      The public hate gas/electricity companies – seriously Labor grow some nuts and at least threaten them with strong reservation.
      Longer they leave it the more of the blame they are going to wear.

      • [email protected]

        You’re not wrong but it’s just crazy how fast we’ve gone from a decade of LNP corruption and non-governance to 1 month of ALP gov and every 2nd person is saying “they better fix it now or we’ll make em regret it” lol, so much inconsistency from the constituents.

        • The Travelling PhantomMEMBER

          Labor are not from/lack marketing…people love pipers
          (Not that Labor are much better or great though)

          • drsmithyMEMBER

            No, they’re simply held to a different standard.

            A Labor Government that doesn’t improve things is considered a failure.

            A Coalition Government that doesn’t burn the whole country down is considered a success.

          • The Travelling PhantomMEMBER

            Weird stat, MFC on a loosing streak sice liberals lost Kooyong :/

    • LeMon3MEMBER

      It’s more complicated than the journo understands. But that’s no surprise, hey?

      • ErmingtonPlumbingMEMBER

        It’s all a result of our essential services being farmed out to profit seeking entities and the contracts that get written in their favour.
        How long have we had hammered into us that Privatisation is a magical cure all.
        It isn’t.
        At least all that “Union excess” if the past got rolled back into the Australian economy.
        Now corporate manipulation and profit excess has us paying more With the excess going into the hands of foreign concentrated wealth.
        Sucking money out of our economy.
        Like MB said should have been nationalized yesterday

        • LeMon3MEMBER

          I don’t think there’s a single word in there I can disagree with.
          OTOH, from the point of view of a generator (pure generator, not vertically integrated), cost of inputs goes up, price of outputs needs to go up.
          If the mandated price for outputs is below the desired profit line, then there’s no point bidding. Just idle the machines and send everyone home. Catch up on some maintenance, maybe.
          And here we are.
          Nationalising only the generators won’t achieve much.
          Using the export terminals in Gladstone as target practice for the RAAF or RAN would do much more to help. Ditto blockading the Port of Newcastle.

  6. SpiManMEMBER

    Do not forget the impact of a recession on people’s lives….from the “Big Short” character portrayed by Brad Pitt. “For every 1.0% increase in the unemployment rate, 40,000 people die”. It may not necessarily apply to Aus, but what if it did. Again, it’s the ordinary punter that cops it.
    https://www.youtube.com/watch?v=7eYcWpgCb7o

    • footsore

      I had dinner with someone who works with DV and assault victims last night. She said that it is getting worse and the problem of nowhere to go even if they could get away is being made worse by the right rental markets. It’s going to get worse before it gets better.

      • LeMon3MEMBER

        Seeing the same here. We have a friend who runs a local women’s shelter. Business is booming, so to speak. 🙁

        • SpiManMEMBER

          Thanks for the feedback….it’s the most vulnerable of people who always get forgotten…

    • Mining BoganMEMBER

      It was a pattern I saw through all the booms and busts in FNQ from the 80s on. DV, family breakups, suicides. I wrote about it n here a decade ago. Warned about it. But nobody cares when they think they’re getting wealthier.

      Now here we are again.

      And then people will think they’re rich again.

      And it will happen again.

  8. Fishing72MEMBER

    Fcuk I’m bored of the euphemisms:

    “Bailing out” developers, “ Stimulus packages’ for companies, “ subsidies” for toll road monopolies and “support packages” to the tune of $5000,000,000.00 for child care industry players.

    It’s nothing but the direct distribution of public money to the pockets of those who’ve corrupted/ lobbied the government into contributing to their profits.

    It’s a feature , not a bug of neoliberalism.

    Then there’s the energy and mining corps who put these small potatoes helicopter money for private industry into perspective.

    • The BurbWatcherMEMBER

      Yep.

      Rentierism: the crappiest version of capitalism.

      Would be nice to expunge it, and only have productive and innovative capitalism, where companies needs to reinvest profits to stay competitive, and capital is ‘forced’ into productivity and innovation in order to make yields above that of government bonds.

      Sigh.

      • drsmithyMEMBER

        “Rentierism” is what you get if you let capitalists run capitalism. Because most capitalists fvcking hate the “competition” part of capitalism.

    • skippy

      You rang – ?????

      https://www.nakedcapitalism.com/2014/03/neo-liberalism-expressed-simple-rules.html

      In coming copy and pasta ….

      “What is neoliberalism? Neoliberalism (a.k.a. The Washington Consensus) is the dominant ideology of the political class in Washington D.C., shared by both legacy parties. In fact, it’s not clear there is another ideology, which is why we get seemingly weird policymaking processes like RomneyCare morphing into ObamaCare, even as proponents of each version of the same plan hate each other, “narcissism of small differences”-style. Of course, in neo-liberalism’s house are many mansions, many factions, and many funding sources, so it’s natural, or not, that an immense quantity of obfuscation and expert opinion has accumulated over time, making for many fine distinctions between various shades of neo-liberalism.

      In this brief post, I hope to clear the ground by proposing two simple rules to which neo-liberalism can be reduced. They are:

      Rule #1: Because markets.

      Rule #2: Go die!

      Of course, these rules can’t be applied, willy-nilly, inartfully, in just any context; Rule #1 — and here we owe an immense debt of gratitude to the work of Outis Philalithopoulos on academic choice theory — doesn’t apply to in (let’s label it) Invariant #1: The world of the neo-liberal practitioners themselves; the academic guilds, media outlets[1], and think tanks to which they adhere, Flexian style, are distinctly not market-driven; just look at Thomas Friedman. It follows that Rule #2 does not apply to neo-liberal practitioners either, because of their social position just described in Invariant #1: “wingnut welfare” and its equivalent in the “progressive” nomenklatura; they will have — to strike a blow at random — corporate health insurance. In addition, we have Invariant #2: The world of the 0.01%, to whom no rules apply by definition. Summarizing, the rules do not apply in the following two contexts:

      Invariant #1: The rules of neoliberalism do not apply to those who write the rules.

      Invariant #2: The rules of neoliberalism do not apply in the world of the 0.01%.

      Both have impunity[2]. These asymmetries will become more interesting shortly.

      So (reviewing), to Rule #1: “Because markets” uses that stupid “because” meme:

      Let’s start with the dull stuff, because pragmatism. … Linguists are calling the “prepositional-because.” Or the “because-noun.” [For example:] But Iowa still wants to sell eggs to California, because money. It’s a usage, in other words, that is exceptionally bloggy and aggressively casual and implicitly ironic. And also highly adaptable. … it also conveys a certain universality. When I say, for example, “The talks broke down because politics,” I’m not just describing a circumstance. I’m also describing a category. I’m making grand and yet ironized claims, announcing a situation and commenting on that situation at the same time. I’m offering an explanation and rolling my eyes—and I’m able to do it with one little word. Because variety. Because Internet. Because language.

      Because neo-liberalism. Because I like the idea, a lot, of catching the Mount Pelerin Society, Pinochet, Diane Rehm, the Friedmans, Joe Biden, Rush Limbaugh, and the people who drafted the Democratic platform in one big net, and then deep-sixing the entire squirming and gesticulating political class with language that’s “exceptionally bloggy and aggressively casual and implicitly ironic.”

      And this tactic really is fair. Trap a neo-liberal in conversation next to a whiteboard, or hand them a napkin, and you can probably coax them to “educate” you by drawing the famous “Because Markets” diagram, which looks like this:

      Figure 1: “Because Markets”

      500px-Supply-and-demand.svg

      And when your targeted neo-liberal is done sketching, they will express the idea, with varying degrees of quasi-religious fervor, that the price set by the intersection of the downward-sloping demand curve and the upward-sloping supply curve is the right price.” – snip

      And as always …. don’t forget too ***breathe*** …. its a life saver ….

      PS. walking the beasties is good too so off I go …

        • [email protected]

          Not arguing any of that just sticking it to old mate anti vax, riding in here on his horse whinging about rhetoric when we spent 2 years of him posting anti vax rhetoric the majority of the time. Just another chortle worthy moment

          • skippy

            Be that as it may context matters and allowing others to be wrong on some things, but acknowledging when its right/correct in other things is how we get out of this fix. Just to see 72 use the term neoliberalism in basic context is not something I would have thought awhile back and why I presented him more via the link. He – asked – for more information some time ago and I summited the softpedia link for his consideration without comment.

    • LeMon3MEMBER

      Norfolk Island? Still lots of fish there, I think.
      Mind you, the locals will probably make all the blow-ins swim home if stuff gets really tuff, so maybe not.
      Personally, I’m betting on the Manning Valley in NSW. Poor soil, poor people, no reason for anyone to come here. More than walking distance from Sydney…

        • LeMon3MEMBER

          Depending on why the soil is poor, it may or may not be easy to remediate. Overgrazed young clays are pretty easy to fix. Our 500 million year old ridge gravel and shale, not so much. If you’re *really* interested, go find a copy of “The Intelligent Gardener” by Steve Solomon (a septic living in Tassie for the last couple of decades) – more detail than you ever thought you could want.

        • LeMon3MEMBER

          Oh, and it’s surprising just how much good soil there is from Vic to SEQ. All those places that Santos wants to go fracking in? Mostly good soil, no matter how abused. There’s a chunk of really old played out stuff from north of Newie to south of Grafton and over to Armidale. It’s older than the carboniferous era, so, except for some bits that had serious volcanic activity, there’s no coal, oil or gas. One of the main reasons we moved here – no-one is going to come and dig up our farm looking for energy…

    • The Travelling PhantomMEMBER

      The Australian Antarctic Territory, lots of bears out hunting after long hibernation , so you’ll have the whole region for yourself.
      * disclaimer my post contains 1 fallacy

      • GingerMEMBER

        shhh.. I haven’t been there for many years and it’s best remaining ‘undiscovered’. Wiki says population of 1000 so too late! I have family from around there and had a dear friend whose family home of Devil Devil Lodge was built by Mr Pink (not a Reservoir Dog) from local timber, confirmed legend has it that he carried the wood stove on his back from Mossman up the Rex to Julatten.

      • SoolMEMBER

        West coast SA southern Eyre Peninsula gods own country.
        Good food, good seafood, some ok wines. Plenty of local fair to survive the next holocaust.

  13. The Grey RiderMEMBER

    Phil Lowe on 7:30…the RBA is targeting inflation for the good of the nation…sorry RE market.

  14. GavinMEMBER

    Australian stocks were the wurst of course, down more than 4.5% at one point on the ASX200 before eventually closing some 3.5% lower at 6686 points as it played catchup to other correlated risk markets.

    Don’t be such a sauerkraut!

  16. JasonMEMBER

    Did I hear something about Josh Frydenburg potentially being the next CEO of the AFL?

  19. Mining BoganMEMBER

    Will England go for it? Chasing 299 with an aggressive Stokes in charge.

    Three boundaries in the first over…

    • SoolMEMBER

      He keeps banging on about that $250B that Aussie savers have in their back pocket, so it’s all OK. Even as CPI blows off & wages are stagnant & home loan rates rise & petrol explodes & food cost are way over official CPI (whatever that really is?).It doesn’t matter as he reckons the punters have heaps of dosh to cover the extra costs coming their way. Nothing to see here look over there. Far out where is all that savings? I’d like to see analysis of who has the savings. Pretty sure Joe Average hasn’t got a share of that $250B. Made up number anyway!

      • ErmingtonPlumbingMEMBER

        The Corporate media are going to be showing their true pro plutocracy colours during this coming recession/depression.

    • GavinMEMBER

      He had this smirk through the whole thing. Leigh Sales didn’t really ask any difficult questions either. You could tell Phil knew when he was lying as he side glanced at the Camera. 🙂