Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Asian stocks have slipped in the first session of the trading week due to the very disappointing global PMI prints from Friday night that saw Wall Street lose over 1%. Local stocks have weathered the poor start a bit better with the Australian dollar managing to almost hold on to its recent weekly high.  Oil prices are falling again with Brent crude sliding further lower to the $96USD per barrel level, while gold hasn’t moved after its big short covering rally from Friday night, hovering here at the $1724USD per ounce level:

Mainland Chinese share markets are sliding into the close with the Shanghai Composite down 0.4% to 3256 points while the Hang Seng Index is the worst in the region, down another full 1% to 20394 points. Japanese stock markets have finally reverted after a week long surge, with the Nikkei 225 down 0.8% to 27700 points as the collapse in the USDJPY pair from Friday night creates a Yen headwind:

Australian stocks had a scratch session with the ASX200 closing a handful of points lower, still unable to cross back above the 6800 point level, finishing at 6789 points. The Australian dollar gapped lower in the morning before recovering to be just above the 69 handle after rejecting the 70 level on Friday night after putting in a new weekly high:

Eurostoxx and US futures are steady as we head into the European open, with the S&P500 four hourly futures chart showing price action unable to breakthrough the 4000 point level as this nascent rally rolls over but at least stays above the previous weeks’ high:

The economic calendar starts the trading week with the latest German IFO business survey.

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Comments

  1. Quantitative FleecingMEMBER

    Next few days:
    – June Aus inflation data
    – US inflation data
    – Fed rate hike
    – RBA rate hike next Tuesday

    🍿 🍿 🍿

  2. Hill Billy 55MEMBER

    Melbourne annual prices going negative and Brisbane quarterly house prices going negative. As TTP said, great entertainment. Pop the Corn!!!!!!!

    • Almost nothing makes me happier than seeing john barilaro feeling very uncomfortable.

  3. Mike Herman TroutMEMBER

    Hi guys, which is safer? Money in a bank up to 250k or an Australian treasury bond? Currently there is a coupon paying 5.5% with a maturity date of April 23. Any thoughts greatly appreciated.

    • Should be same credit rating on both if guaranteed by the govt (in fact, slight better in the bank on the miniscule chance that the govt defaults but the bank doesn’t).

      Re the 5.5% coupon – presumably the cost of the bond is greater than 100% of notional because no Aust govt bond is paying 5.5% for a 9 month term.

      • Mike Herman TroutMEMBER

        Thanks Jason. I have minimal understanding of bonds. It’s says 5.5 but not sure on details. You’re most likely right.

  4. And the Evergrand train wreck continues to astound
    https://www.bbc.com/news/business-62287685
    Wonder if DLS will lead with this tomorrow.
    This Chinese RE collapse is real and coming to Ponzi scheme near you
    It’s all connected, it’s the constitution, it’s Mabo, it’s justice, it’s the law, it’s the vibe and ah, no that’s it. it’s the vibe. ..I rest my case!