Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Asian stocks are having a relatively good response to the overnight higher risk sentiment following the latest Fed rate hike and subsequent slowdown signals, yet Chinese shares remain the laggard in the region. Stronger moves against USD are still holding on with the Australian dollar just above the 70 level while oil prices are slowly pushing higher with Brent crude now back at the $103USD per barrel level, while gold has inched slightly higher to build on its overnight gains, currently at the $1740USD per ounce level, almost making a two week high:

Mainland Chinese share markets were up at the halfway point but are slowing down at the close with the Shanghai Composite up just 0.2% at 3283 points while the Hang Seng Index is still in retracement mode, down 0.2% at 20623 points. Japanese stock markets are doing a little bit better, with the Nikkei 225 up 0.3% to 27815 points as the USDJPY pair drops sharply down to the mid 135 level as Yen buyers step in amid the renewed USD weakness for a new weekly low:

Australian stocks had a very solid lift from the Fed rate hike fallout with the ASX200 closing nearly 1% higher to almost get to the 6900 point level, finishing at 6889 points. The Australian dollar has again tried to punch through the 70 handle but hasn’t advanced on last night’s post Fed move as momentum remains nicely overbought:

Eurostoxx and US futures are not moving but still holding on to their overnight gains with the S&P500 four hourly futures chart showing price action wanting to continue its breakthrough above the 4000 point level to start a new relief rally:

The economic calendar doesn’t cool off tonight following the Fed, with German inflation and US Q2 GDP results dominating.

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Comments

  1. haroldusMEMBER

    hay reus, I know league is a little proletariat for you, but you may enjoy tonight’s game.

    Your home team (many of the players I’m sure you know from the parties) are playing a team of woofta lovers for a place in the finals.

    It adds a certain frisson to the contest.

  2. So, Monkeypox was declared a communicable disease in Australia today…….this protects general insurance companies from claims arising from it. There were 1,000 cases in the US today….expecting 100,000 total by end August and a million total by Christmas.

    https://twitter.com/BNOFeed/status/1552410200111517696

    Pro tips…..it is 20 times as big as the Covid virus and very hard to kill outside the human body It can live between 2 to 3 weeks on surfaces and soap and water won’t kill it. Ethanol based cleaners are not very successful either. Dettol is the go for surfaces and the hand scrub used by doctors is needed for personal hygiene.

    It can survive the washing machine which means apart from stockpiling Dettol there will a rush on old copper boilers retro-fitted to LPG because the steam laundries will be busy. You could just throw their clothes, towels and sheets out I suppose.

    We will know more when it gets into Spanish and US schools.

    • I can’t say I’m particularly concerned about Monkeypox, not being in the target demographic.

      I can’t even catch the bloody Rona, despite having slept with my partner for several days while she was at her most infectious.

      • In a world of financialised globalisation, prices of food are not determined by the simplistic laws of supply and demand.

        Prices are determined by a wall of money wielded by relatively few, invisible speculators and aimed at largely unregulated global grain markets.

        Share System Change

        Yesterday, the Financial Times ran an article on global food security. Editors made clear the text was not the work of FT journalists, but “partner content.” The name of the partner? Bayer AG – by their own definition “a global leader in agriculture.” The article began thus:

        While the people of Ukraine face an ongoing nightmare, the Russian invasion has set in motion a global food crisis that requires our attention and immediate action. In fact, the war has knocked the global food system off its axis, risking a humanitarian disaster.

        As readers will know from an earlier post, I take a different view. The global food crisis is a consequence of commodity price speculation on Wall St and the CME – not directly the Russian invasion of Ukraine. Readers may think this controversial, but bear with me, as we hear Bayer out:

        Ukraine is one of the most important suppliers of wheat, corn, oils, and other essential commodities to the world. Known as the breadbasket of the world, the country has secured the food supply for parts of the Middle East and East Africa, including countries like Egypt and Lebanon whose stability is paramount for the region.

        These facts – the invasion of Ukraine, and the latter’s role as “as one of the most important suppliers of wheat, corn…” were directly contradicted by Bayer AG on another platform: when announcing its Q1 earnings results – as Seeking Alpha reported in May this year – fully three months after war began:

        The German conglomerate’s core EPS grew +36.3% Y/Y to €3.53. Net income (including discontinued operations) grew +57.5% to ~€3.29B. Group sales grew +18.7% Y/Y (or +14.3% on a currency and portfolio-adjusted basis, or Fx & portfolio adj.) to ~€14.64B.

        “We achieved outstanding sales and earnings growth, with particularly substantial gains for our agriculture business,” said Werner Baumann, chairman of the board of management.

        The company said that in Q1 group sales and earnings were not negatively impacted by Russia’s invasion of Ukraine. In total, the two countries account for ~3% of sales.

        The emphases are mine. Now of course the invasion of Ukraine, and the fact that both Russia and Ukraine account for a proportion of global sales of grain had a material impact on speculators. But as Bayer AG acknowledges the share of sales is not large enough to cause the kind of food crisis the world has endured. This is because Russia produces just 11% of the world’s wheat and Ukraine produces 3%. There are plentiful supplies elsewhere to compensate for the loss of these shares in global grain markets. Which partly explains why Bayer AG were able to rake in massive gains from the deliberate inflation of food price rises. – snip

        https://annpettifor.substack.com/p/grain-inflation-starve-the-poor-feed

        Rule number one – Because[tm] markets …

        Rule number two – Die …

  3. MB brains trust, I have a question:
    Doing the transfer case and gearbox oil changes on the TF rodeo and the Gregory’s says to use engine oil but all the parts finders on the retail websites recommend 75w-85 gear oil.

    What’s the difference? What should I use? (Many many posts on 4wd forums with many many arguments and nearly always a 50/50 split on what to use lol).

    • Dim Jim saying it’s terrible that Aussies are going to be doing it tough for a time, no fkn kidding! And it’s largly thanks to him doing nothing to alleviate it.

  4. The Grey RiderMEMBER

    So inflation is not expected to settle into the 2 – 3% target band until 2024…hopes and prayers. Difficult to see any interest cuts before then.

      • The Traveling Wilbur

        Appletini, Appletini, Appletini…

        Reminds me of the time I returned to NZ after backpacking around Sydney amd Melbourne. First NZ bar I walk into a few weeks later I asked the barmaid “Do you have VB?”. I was very very lucky to be able to walk out of there without requiring assistance.

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