A rough birth looms for Australian LNG

screaming-birth From Fairfax: Under the regime, announced overnight Sydney time, a tax of 3.5 per cent will be levied on LNG export projects, compared with the original proposal in February of up to 7 per cent. The cut came after Malaysian national oil company Petronas threatened to suspend its plans for an LNG venture in Canada. It boosts the prospects for projects there, analysts say. "It's bad news for Browse because suddenly there's a lot more competition at the high end of the cost curve," said Macquarie Equities analyst Adrian Wood. "Cheap projects are going to go ahead no matter what, but suddenly if...
read more

Macro Morning: Oil slide

marketmorning By Chris Becker Mixed is the best one can spin last night's actions on markets as a lack of follow through from the four day rebound rally in risk could mostly be explained by a neutral CPI reading in the US, coming in as expected but in the "danger zone" well below 2%.  Across the Atlantic, the BoE kept interest rates and their QE plans steady with another central bank yet again noting no inflationary pressures building. Cable (GBPUSD) as a result broke down almost hitting the 160 handle - I"m watching the 16010 level very closely on the four hourlies and dailies as a sign of capitulation...
read more

Memo to business: The TPP is not free trade

ScreenHunter_3418 Jul. 23 10.44 By Leith van Onselen A consortium of Australian business groups have released a joint statement backing the Trans-Pacific Partnership (TPP) trade negotiations, and urging trade ministers to make a concerted push to conclude negotiations when they meet in Sydney on Friday. From The AFR: The Business Council of Australia, American Chamber of Commerce Australian chapter and the US Chamber of Commerce issued a joint statement on Wednesday declaring the US-led Trans Pacific Partnership “key to creating jobs’’... “A successful TPP will mean more jobs, higher wages, stronger growth, a...
read more

China and Australia trade blows

images From the FT: China will officially launch a new $50bn Asia Infrastructure Investment Bank on Friday as it steps up its challenge to global financial institutions like the World Bank that it feels are dominated by America and its allies. But only 20 mostly small economies, many of them effectively client states of China, will become founding members of the bank at Friday’s ceremony in Beijing after Washington lobbied furiously to stop other countries from signing up. ...India will be the only large economy to sign up to the Chinese initiative at the ceremony in the Great Hall of the People in...
read more

APM: House price growth slowing

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen Australian Property Monitors (APM) (now called Domain Group) has released its September quarter house and unit price results (below), which recorded a 1.2% increase in house prices over the quarter at the national capital city level, and a 0.3% rise in national capital city unit prices. In the year to September 2014, APM recorded an 9.4% increase in national capital city house prices and a 6.8% rise in unit values - a deceleration from the 11.0% (houses) and 8.5% (units) annual growth recorded in the June quarter release. Looking at the capital city breakdown, you can...
read more

What kind of macroprudential can we expect?

flat,550x550,075,f By David Llewellyn-Smith Macroprudential tightening is coming but what kind? In the course of a year, the Reserve Bank of Australia (RBA) has swung from a viewpoint that macroprudential is "dreaded" and the "latest fad" to an endorsement of doing something about the housing bubble that doesn't involve raising interest rates. Throughout this time there have been two lines of debate of what kind of macroprudential might be used. The first is requiring banks to list interest rate buffers within mortgage calculators: “Other than avoiding an over-easing of monetary policy, the most promising...
read more

Mirvac’s negative gearing plea doesn’t make sense

ScreenHunter_4625 Oct. 23 07.57 By Leith van Onselen Mirvac Group CEO, Susan Lloyd-Hurwitz, has thrown a wet blanket over calls to reform Australia's negative gearing regime, claiming that any wind back of the rules would pose serious risks to the stock of rental properties available. From The Australian: "...as a society, we would have to think long and hard about the removal of negative gearing because it has very far-reaching implications”... “We need rental stock and it’s currently owned by mum-and-dad investors, negatively geared,’’ Ms Lloyd-Hurwitz said, noting that, unlike the US, Australian institutions and...
read more

Daily iron ore price update

dfbw Her are the iron ore charts for October 22, 2014: Singapore was closed so no iron ore prices. The rebar average rally powered on but futures fell sharply again. Sensible enough given it's the Hebei effect described yesterday. That's it...
read more

More conflicting signals on Chinese property

201409reinv Cross posted from Investing in Chinese Stocks. Two Beijing real estate agencies are on pace to hit 17,000 sales in October, up from the 9109 sales the two combined for in September. Since their market share is 55%, analysts are extrapolating sales citywide hitting 11,500 already, while one insider at another agency thinks sales have already hit 16,000 homes. Average transaction price increased 2.6% in the past week, and another agency that measures bargaining room says the space for haggling has shrunk from over 3% in early October to 2.6% last week. iFeng: 房贷松绑20天作用渐显...
read more

Links 23 October

ScreenHunter_01 Apr. 02 06.19 Global Macro / Markets / Investing: Currency Wars Evolve With Goal of Avoiding Deflation - Bloomberg Forex-Rigging Fines Could Hit $41 Billion Globally: Citi - Bloomberg Some common lies investors tell themselves - A Wealth of Common Sense North America: Nelson Bunker Hunt, Texas Tycoon, Dies at 88 - New York Times Home Sales Reach 12-Month High - New York Times Fed Can Back Up Tough Talk on Bank Behavior With Action - Bloomberg US economic momentum is intact - Quartz Is cheap gasoline good for the US? - Fortune Why attacking the Fed for making inequality worse is mostly wrong...
read more

ASX at the close

ScreenHunter_31 Jun. 04 16.42 Stan Shamu for Chris Weston, Chief Market Strategist at IG Markets Asia has picked up the positive leads from European and US trade and rallied, with equities erasing some of the recent sharp falls. The rally in global markets began in European trade as investors reacted to reports the ECB is looking to add corporate bond purchases to the covered bond purchases it commenced this week. Markets saw this as a move closer to full-blown QE, and peripheral bonds rallied as a result – the IBEX and MIB outperformed the DAX and CAC. The market would really want to see government bonds and...
read more

Why we need more rate cuts

Capture The business-as-usual crowd in the press has had an interesting reaction to today's soft CPI. Phil Baker at the AFR reckons: The real concern is do we need that rate cut and are we going down the deflationary path like the rest of the world? ...Wednesday’s latest inflation report won’t kill off talk of the possibility that the Reserve Bank can cut the official cash rate one more time if it wants to. But with a property market thriving, the RBA has so far been reluctant to add to it. If borrowing rates are at record lows what good would another rate cut do? It would still mean lower...
read more

Iron ore miners rally over futures

djh It's rally day for everyone today, with the iron ore majors up strongly all over: The idiocy spreads are clearly widening again now: Juniors are mixed but mostly still gasping for breath: Dalian futures are down 3...
read more

REINSW slams RBA’s jekyll and hyde routine

ScreenHunter_4619 Oct. 22 13.57 By Leith van Onselen President of the Real Estate Institute of New South Wales (REINSW), Malcolm Gunning, has this afternoon slammed the Reserve Bank Of Australia's (RBA) inconsistency on property investment, which has seen it swing from encouraging investment to being on the brink of implementing macroprudential curbs to slow the property market down. From The Australian: "Six months ago, Mr Stevens was encouraging investment in real estate," Mr Gunning said. "Now that the public is buying properties with confidence, the RBA has changed its mind and is being critical, giving warnings about...
read more

West Pilbara lunacy revs up

Capture From the West Australian: China's Baosteel has signalled that sagging iron ore prices will not hold back development of its West Pilbara iron project, recruiting former Iron Ore Holdings boss Alwyn Vorster to head up its local iron ore business. Mr Vorster confirmed yesterday he had accepted the role as general manager iron ore at Aquila Resources, delisted from the stock exchange earlier this year after Baosteel and Aurizon closed a $1.4 billion takeover. The poor outlook for iron ore prices has industry watchers discounting the likely development of multibillion-dollar iron ore projects,...
read more

Rents decouple from prices, population growth

ScreenHunter_17 Jul. 16 08.30 By Leith van Onselen The September quarter consumer price index (CPI) data, released today by the Australian Bureau of Statistics (ABS), revealed continued moderate rental growth at the national capital city level. According to the ABS, rents nationally grew by 0.7% over the September quarter of 2014 – up slightly on the 0.6% growth recorded in June – but was only 2.5% in the year to September, with a clear downwards trend evident (see below charts). What's most interesting about the current moderate rental growth is that it is at odds with other housing-related indicators,...
read more

Enjoy the great ASX de-rating!

Capture UBS is one of those sensible sell side shops that has been pushing ideas similar to my own post-2011 allocation thoughts for Australian shares in positioning for the falling currency and slowing China: Correction Restores Some Value Since our last rebalance in early September the Australian market experienced a 9%  correction before bouncing just over 3% from the lows of last week. The correction has  restored some value to the market with the market PE (1 year forward) retracing from  14.9x in early September to 13.8x currently. We believe the market P/E can push back  into the 14.0 to 14.5x...
read more

Australian CPI in detail

ScreenHunter_01 Jun. 08 23.33 By Leith van Onselen As noted briefly by Houses & Holes, the Australian Bureau of Statistics (ABS) has released the Consumer Price Index (CPI) data for the September quarter 0f 2014, which registered a modest quarterly increase in prices, with the result also coming ahead of economists’ expectations of 0.4% inflation over the quarter. According to the ABS, headline CPI rose by a modest 0.5% in the September quarter, which follows June’s 0.5% rise (see next chart). On an annual basis, headline CPI growth fell to 2.3% from 3.0% in the June quarter, which is well within the...
read more

CPI eases

images The Australian Bureau of Statistics has released the September quarter CPI and inflation is easing at 0.5% (0.4 expected) for the quarter and a tame 2.2% for the year. The analytical series are now easing as well with the trimmed mean at 0.4% and 2.5% and weighted median 0.6% and 2.6%. All figures are down sharply from June QTR growth rates: SEPTEMBER KEY FIGURES Jun Qtr 2014 to Sep Qtr 2014 Sep Qtr 2013 to Sep Qtr 2014 Weighted average of eight capital cities % change % change All groups CPI 0.5 2.3 Food and non-alcoholic...
read more

US goes back to the future with high LVR

ScreenHunter_4599 Oct. 22 09.48 By Leith van Onselen Just six years ago, the US and a number of European nations experienced first hand the carnage of a full scale property bust.  These experiences should have taught the world that debt-fueled property speculation, along with placing regulatory constraints on housing supply, is a recipe for disaster and bound to end badly. Yet last year, the Obama Administration looked to cement the US housing recovery by re-igniting sub-prime lending - one of the factors that caused the US housing bust (along with the Global Financial Crisis) in the first place - by getting banks to lend...
read more

DEEWR jobs ads show weak labour market

sdfq The Department of Education, Employment and Workplace Relations Job Vacancies index is out for September and has fallen away 0.8 on the month: The trend remains a shallow and vulnerable recovery but vacancies have barely climbed above their GFC low: Falls were widespread: Skilled vacancies were a littler better: This remains an historically lousy jobs market. Full report...
read more

Leading index sinks further

erty3 From Westpac's Bill Evans: The six month annualised deviation from trend growth rate of the Westpac Melbourne Institute Leading Index which indicates the likely pace of economic growth three to nine months into the future fell from –1.07% in August to –1.16% in September. This is the eighth consecutive month where the growth rate in the Index has been below trend. That follows 13 consecutive months to February this year when the growth rate was above trend. The index continues to indicate that we can expect growth in the Australian economy to stay below trend in the final quarter...
read more

BHP unleashes iron ore tide

Capture The BHP third quarter production report is out iron ore is fountaining from the big Australian: Western Australia Iron Ore (WAIO) production increased by 15 per cent in the September 2014 quarter to a record  62 Mt (100 per cent basis) as the ramp-up of Jimblebar continued ahead of schedule and we improved the  availability, utilisation and rate of our integrated supply chain. In addition to the strong operational performance  achieved at our mines, a higher proportion of direct to ship ore increased outflow capacity at the port and facilitated  record sales volumes of 63 Mt (100 per cent...
read more

China accelerates away from the quarry

fdghe A few extra charts this morning from the CBA commodities team gives an insight into just how fast the Chinese economy is moving way from Australia. Net exports are a new support for growth as imports fall back: Consumption and investment are still stuck together: Fixed asset investment is falling across the board (though infrastructure has been rising): The Li Keqiang index is looking sick:     Power production is galloping away from thermal coal:   And growth in residential floor space under construction is fading fast: As starts...
read more

Coalition gives ground on under-30s dole delay

ScreenHunter_3946 Sep. 01 12.43 By Leith van Onselen The Government's plan to make job seekers aged under 30 wait six months before receiving Youth Allowance or Newstart looks doomed, with Family First Senator, Bob Day, proposing a compromise one month delay and Social Services Minister, Kevin Andrews, indicating the government would support the measure. From The Canberra Times: "I can't say [what the government's final position would be] but one month would be better than what we've got now," Mr Andrews told Fairfax Media. The Senate crossbench has been staunchly opposed to the idea of a six-month wait but Senator Day, of...
read more
Page 1 of 72312345...102030...Last »