"The economy continued picking up amid severe conditions due to the coronavirus, but the pace has recently been slowing.Automobile production weakened lately.. as parts supply shortages due to COVID-19 outbreaks in South East Asia have had material impacts on carmarkers."- Another lackadaisical day beckons in Europe with the market still looking rather indecisive this week for the most part. The dollar was sluggish yesterday while equities gained, with 10-year Treasury yields also inching up a little back to 1.30%.
- When the sleeping giant awakens, things don't tend to end well. I reckon that may be the case with China right now as the market appears to be rather sanguine about all the risks involved amid the shift in direction by local authorities.
The AUD was gaining strongly due to it's pro-cyclical bias. Vaccine fuelled optimism helped push AUD higher as did higher Iron ore prices alongside signs of China's economy rebounding. However, recently that bullish bias has moved to a far more neutral footing.A combination of the delta variant locking down large areas of Australia, RBA's Lowe seeing no interest rate hikes until 2024, a contraction of at least 2% expected for Q2, falling Iron Ore prices, and a slowdown in China's growth has all been weighing on the AUD. The last data points from China this week show a slowdown in both industrial production and retail sales.
RBA extends QE timeframe
At the last RBA meeting the RBA continued with its plan to taper their asset purchases. This was a surprise. However, the RBA's decision to taper was offset by the fact that they extended the asset purchases to at least February 2022. Previously, they were expected to last until November 2021. So, even though the tapering...
- The market already looks sluggish to start the day and amid the indecision this week, it is tough to see any firm convictions amid the lack of key releases to follow in Europe.
- Going back to FX, there just isn't a clear and concise theme going around at the moment and I reckon we may be caught in this state until either something gives way technically or we get some form of spark after the FOMC meeting next week.
- We do not expect permanent demand destruction from this fourth Covid wave, but rather a delay in the global reopeningan increasing number of indicators are pointing to an inflection in the Delta variant, setting up for a powerful holiday season (unlike last year)For these reasons, we remain positive on the equity outlook, expect S&P 500 to ... surpass 5,000 next year on better than expected earningsWe are raising our EPS estimates ... from $230 to $240 for 2022 (consensus at $220.35)
- Police in the city have directed that public transport will not run through the CBD on Saturday 18 September.All metropolitan and regional train services, trams and buses will see an impact from 8am.
That jobless rate appears a good result, but it came from a big, big drop in labour force participation as many unemployed people could not physically leave their homes to search for work due to lockdowns and thus withdrew from the labour force. This is terrible news. The Australian Bureau of Statistics gave guidance on the report to the effect that the best indicator to look at was the 'hours worked' on the month, which fell a huge 3.7% on the month. Again, terrible.
AUD/USD has dribbled a little lower since the data were published but the net movement on the day is small only. NZD/USD has dipped a little alongside.
USD/CAD is up a little while EUR/USD and GBP/USD are not much changed with no news nor data.
On the Geo-Political front US President Biden, UK PM Johnson and Australian PM Morrisson announced a new security alliance between the three counties (the awkwardly named AUKUS alliance) - Australia will get nuclear-powered submarines for the first...
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- While the Moody's piece focuses on airports the bigger picture should be a broad recovery across the economy. NSW is beginning to emerge from lockdown already (slow steps as cases are still growing rapidly and the peak in hospitalisations has not yet been reached) and Victoria will outline its plan this coming Sunday. These two states have around half of Australia's population between them, are a big part of the national economy.
- I haven't been posting on the race but just an update now as a favourite seems to be clearly emerging. Taro Kono is out in front, well ahead of ex-LDP policy chief Fumio Kishida.
- While the jobless rate dropped, so did the participation rate, the Australian Bureau of Statistics noting its being unemployed people drop out of the jobs market given it is basically impossible to leave your home to look for a job.
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- RT @ABartonMacro: ?? China Evergrande notes that trading of all onshore bonds will be suspended today. Trading is scheduled to recommence o…
ForexLive Thu 16 Sep 2021 01:30 - ban applies to nuclear-powered or nuclear-armed shipsnot permitted to enter New Zealand ports or New Zealand watersthe New Zealand Nuclear Free Zone, Disarmament, and Arms Control Act 1987"entry into the internal waters of New Zealand 12 nautical miles (22.2 km, 13 13?16 statute miles) radius by any ship whose propulsion is wholly or partly dependent on nuclear power"
- Once the September 2021 contracts expire on Friday September 17 the standard-size contracts will be delisted. The E-mini suite of futures and options on the S&P 500 Index will, of course, remain.
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