Macro Afternoon

By in Miscellaneous

| 55 comments

Basically the USD is pulling Arnold Schwarzenegger poses at almost everything today

AUD/USD

EUR/USD

USD/JPY

GBP/USD

USD/RUB

Worth noting, though, the USD/RUB rate, pretty steady for a couple of years in the lead up to the outbreak of war, a mega surge in March, but ever after those Russian energy sales, despite the financial sanctions and energy embargoes actually mean the Russian currency is stronger against the USD now than it has been in a while.

Gold

 

Brent Crude

 

Wheat

 

Platinum

 

Copper

 

Australia 200

 

S&P 500

UK 100

Japan 225

NAS100

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Comments

  1. call me ArtieMEMBER

    Thanks for the daily summary Gunna.
    On another topic…what about that Barilaro eh? What a dead-set genius at working the system to pad his wealth. He looks about as smart as the lower middle third of my high school class

    • ITAgMEMBER

      But would Matty Guy’s IPA handlers let him make a fuss about COVID. Even Georgie Crosier, shadow for health, is under threat from the Right.

    • dennisMEMBER

      nyleta,

      Not long ago DLS said that the Fed needed to break oil prices, any chance you can expand on how that would be achieved by them?

      Or Dave, if you see this.

      • C.M.BurnsMEMBER

        Oil’s price is set on a global level (leaving aside direct country to country deals like China-Russia etc). And oil and it’s higher processed derivatives like petrol, diesel, fertiliser etc, are a not insignificant input cost for just about everything on the planet

        The cost of oil and especially its enhanced products has gone bonkers due to a whole lot of global / structural / geopolitical issues. In short, we face a global oil based energy supply shortage for the next few years. And these will all take years to resolve.

        So it’s a choice of pick your poison: have nearly universal hyperinflation caused by the cost of oil based energy inputs
        Or
        Engineer a (global) recession by raising rates (which is legitimately within most central banks charter). Which is the bluntest of blunt instruments to solve this particular problem but it’s the only one they have.

        • dennisMEMBER

          Okay, so MB’s position is the Fed needs to raise rates to kill demand and therefore oil prices, but doesn’t that sort of counter MB’s talk that the FED will raise rates too high and fast and kill the economy??

          Oh, and thank you, Mr Burns.

          • C.M.BurnsMEMBER

            I have nfi what their position is anymore on a holistic View.

            They have lots of strong positions on specific issues but when you run them against each other then yes, they are contradictory. Ask them to explain it.

            The two core POV seem to be that:
            If you think all this inflationary pressure is transitory (TILOL tm) then the flow on effects will start to counteract the inflation and so interest rate rises are not required (or only in very small rises, but this is never actually detailed)
            Or
            If you think that inflation is secular and the causes (oil / energy inputs, printing trillions of dollarydoos of free money, de-globalization etc) are not going to be solved in the short or even medium term) then raising rates to kill demand is the only real lever available

            And you’re welcome 🙂

          • GingerMEMBER

            I don’t think the former is MB’s position. As Monty Beetlejuice says it is an essential input into practically everything. I reckon fk all is discretionary so why try and kill demand for inelastic goods … to lower price? I don’t get it. There’s something else going on, unsaid or at least missed by me. Start with RBA, why raise rates for cost-push inflation? I don’t get that either unless there is something in “excessive” GDP growth. I don’t think it’s oil or energy as a factor.

          • ZuluMEMBER

            I don’t.think.it’s their position that the FED needs to kill anything, rather that it’s the FED ‘s intention to kill inflation, with the very blunt instrument as stated, which will kill the economy (possibly without doing much to inflation, or maybe that’s just me). Stupid if you ask me. As for inflation I think MB changed from transitionary after war started but still expect China to put a cap on it at.some point as their economy gets hit by COVID & US overstoking + demand destruction and Yuan is devalued.

          • dennisMEMBER

            Hi Zulu,
            I specifically recall DLS saying on at least two occasions that the FED needed to kill oil.

      • nyleta

        DXY above 110 usually achieves that on its own, not enough dollars left out in the world to buy stuff with, they will do that with their interest rate rises. It is a little different this time and in the future since the Russians will restrict supply in the future to the West and nearly all large deposits have been found but $ 70 a barrel looks achievable.

    • alwaysanonMEMBER

      This reply on that thread is gold:

      “ I don’t think people should listen to a word from a guy who sold about $600M of stock in last 6 mos.”

  10. ErmingtonPlumbingMEMBER

    “It was the latest move in a long-running corporate battle between European and Chinese partners in a joint venture, which has huge ramifications for the future of telecommunications in space.

    At its centre are prized satellite permits granted by the UN International Telecommunication Union (ITU), which could give the rightful owner an edge in the burgeoning LEO industry currently dominated by Elon Musk’s SpaceX.

    The licences that give access to satellite spectrum are “critically important”, says Nicholas Eftimiades, a space expert and former US Department of Defense and CIA official. “They have strategic implications, economically, geopolitically, militarily and for information dominance from the earth through space.”

    On one side of the feud are the German partners in the Kleo Connect joint venture, who accuse Chinese investors of trying to steal the licences for use in their home country.

    On the other are the Chinese backers, who argue that the Germans eagerly took their money only to conspire behind their backs to sell the licences to a new bidder in the US with links to Republican donors and the Pentagon”

    https://www.ft.com/content/f1f342ab-d931-44ca-bf0d-f7762db76982

    • ErmingtonPlumbingMEMBER

      “There are roughly 5,000 operational satellites in orbit. The Satellite Industry Association says that
      number could rise to 100,000 by 2030”

      How many times faster than an airliner are these satellites travelling at 28,000kph?
      Makes space tourism seem a little hairy.

      • babstar

        In aviation we have the “big sky theory” flying across the pacific, who the hell else is going to be right here, right now, ever?
        You could fly a random track everyday for a hundred year between Aus and the US and never hit anyone. You may never even see another aircraft.

        Ironically, an organised track system guarantees you will fly directly into a stream of opposite direction traffic increasing the probability of collision.

        Don’t worry, its all still completely controlled.

        Next level thinking therefore is “big space theory”. Just a probability game.

        • ErmingtonPlumbingMEMBER

          When a plane does get hit or just breaks up in flight all those 100s (or thousands) of pieces of debris fall back to earth.
          A broken up satellite debris doesn’t and even a rouge nut or bolt, when travelling at 10 times the speed of a bullet, can really ruin Elons day.
          Especially if the Chinese, Ruskies and Yanks start knocking each others out.

    • MathiasMEMBER

      I’m pretty much of the conclusion that anyone who tells you to ” Go and get an honest job ” is likely suffering from a guilty conscience. I suspect the reason they say such things is because they are drug dealers themselves, have made there money in property illegitimately and probably havent worked an honest day in there life ;p

      I also think the reason people vote Liberal is because 80% of Australia is corrupt, selling drugs, slavery, extortion and everyones basically voting to water down the laws because everyone wants to get away with it.

      Liberal voter is axiom for ” Im a criminal and I sell drugs. ”

      Im eating so much pop corn these days that Im starting to develop a fat gut lol.

  14. Hugh PavletichMEMBER

    China …

    China’s Property Slump Is a Bigger Threat Than Its Lockdowns … Bloomberg

    https://www.bloomberg.com/news/articles/2022-06-22/china-housing-market-slowdown-drags-economy

    The worst decline on record could hold growth below 4% for the rest of the decade.

    While global attention is focused on the economic impact of coronavirus lockdowns in Shanghai and Beijing, the slump in China’s housing market is likely to have even more profound implications.

    An official index that tracks apartment and house sales has posted year-on-year declines for 11 months straight—a record since China created a private property market in the 1990s. With demand for services and commodities generated by housing construction and sales accounting for about 20% of gross domestic product, that represents a big drag on growth this year.

    “This is the worst property downturn on record,” says Lu Ting, chief China economist at Nomura Holdings Inc. The length of the drop exceeds those in 2008 and 2014 that reverberated through global commodity markets by curbing Chinese demand for imported steel and copper. … read more via hyperlink above …

    China Lists Hong Kong Housing Among Big Focuses for Next Leader John Lee … Bloomberg

    https://www.bloomberg.com/news/articles/2022-06-20/china-lists-hong-kong-housing-among-big-focuses-for-next-leader-john-lee?srnd=premium-asia

    • Housing is key issue, after Beijing named it a cause of unrest
    • John Lee to be sworn in on 25th anniversary of return to China

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