16

ASX at the close

Stan Shamu for Chris Weston, Chief Market Strategist at IG Markets Equities rebound on stimulus expectations  The trading environment remains volatile and it didn’t take long for equities to erase some of the losses we saw on Friday. Chinese equities have sprung back to life while the Nikkei and ASX 200 are also enjoying some

Latest posts

10

How the retirement system benefits the rich

By Leith van Onselen ABC’s Fact Check has conducted an interesting examination of the extent to which Australia’s retirement system benefits different income earners and has found that wealthy Australians receive the lion’s share of taxpayer benefits. First, superannuation: …the top 10 per cent of income earners reap about 38 per cent of the government

11

Bill Evans affirms May rate cut

Fresh from our Bill: The minutes of the April monetary policy meeting provide further insights into the current thinking of the Reserve Bank. The decision not to cut rates at the April meeting despite “financial markets assign[ing] a high probability to a reduction in the cash rate at the current meeting” seem to be explained

18

Foreign property buyers off the boil

The NAB quarterly property survey is out (it canvasses property sector insiders) and it’s still all go in the east: The NAB Residential Property Index rose to +21 points in Q1’15, up from +12 points in Q4’14 and sits comfortably above its long-term average (+14 points). Market sentiment improved in all states (except WA), although

22

HIA: Land prices rocket as sales evaporate

By Leith van Onselen The Housing Industry Association (HIA) has released its land sales report for the December quarter of 2014, which revealed a widening divergence between vacant land prices, which continue to climb to record highs, and the number of land sales, which slumped again in the latest quarter and have fallen sharply over

1

CS slams AEMO gas balance outlook

From Credit Suisse: A delicate balance? Last week, the Australian regulator AEMO published a report forecasting a balanced gas market in the near term. We would argue demand destruction forecasts of 150PJa really doesn’t count as “balance” but also that the number is too low. We don’t understand the underlying data – AEMO forecasts for Cooper production and Otway

8

RBA exonerates self of rates leak

The Banana Republic rolls on. From the ABC: The Reserve Bank appears to have been cleared of an internal leak after unusual trading in the Australian dollar seconds before two key interest rate decisions earlier this year. The suspicious trading in February and March had been referred to the Australian Securities and Investments Commission (ASIC)

46

Q&A’s TPP fail

By Leith van Onselen Last night’s Q&A program aired on The ABC was pathetic. Despite having Trade Minister, Andrew Robb, on the panel, and negotiations for the highly contentious Trans-Pacific Partnership (TPP) trade deal drawing to a close, chair Tony Jones failed to allow one question on the issue, despite assurances that there would be

6

China business confidence in hard landing

Just in case you’re wondering why China has entered aggressive easing mode, from Forexlive: The MNI China Business Sentiment Indicator, a gauge of current business sentiment, fell for the fourth consecutive month to 48.8 in April from 52.2 in March, now at its lowest since the beginning of 2009. Confidence in contractionary territory for the

10

RBA minutes go full dove

RBA minutes are out and it’s full dove action. Minutes of the Monetary Policy Meeting of the Reserve Bank Board Sydney – 7 April 2015 Members Present Glenn Stevens (Governor and Chair), Philip Lowe (Deputy Governor), John Akehurst, Roger Corbett AO, John Edwards, Kathryn Fagg, John Fraser (Secretary to the Treasury), Heather Ridout AO, Catherine

22

How to abolish stamp duty

By Leith van Onselen The Property Council of Australia (PCA) has provided a submission to South Australia’s review of state taxation, which repeated its call to abolish stamp duty in exchange for a broad-based land tax. From The Canberra Times: Daniel Gannon, the executive director of the South Australian division of the Property Council says

9

Gotti births Triguboffonomics

By Leith van Onselen Business Spectator’s Robert Gottliebsen (“Gotti”) has penned another piece of Triguboffonomics, arguing that Chinese property investment (immigration) is the key to the Melbourne economy’s future success: Melbourne has approved the construction of over 20,000 apartments in the central business district over the next four years, five times the ‘normal’ level of

13

Consumer confidence at 8-month low

By Leith van Onselen The ANZ-Roy Morgan Research (RMR) consumer confidence index has slumped to an 8-month low, falling by 1.0 points to 108.8 in the week ended 19 April to be tracking well below the long-run average of 113 (see next chart). The overall slump was driven by a deterioration in perceptions about the

47

More heat on dividend imputation rort

By Leith van Onselen Following reports earlier this month that dividend imputation credits received by tax-free (mostly wealthy) superannuation holders over the age of 60 are costing the Budget some $6 billion a year in forgone revenue, The Australia Institute (TAI) has released a new study showing that Australia’s $29 billion system of franking credits

13

Atlas crushed

From the AFR: Embattled iron ore junior Atlas Iron will extend its suspension from trading on Tuesday but is likely to be in receivership by the end of the month, industry sources told Street Talk. …Sources said the majority of the company’s debt-holders were in favour of it entering receivership, an outcome which is likely to be

3

RIO readies iron ore deluge mark II

RIO has released its Q3 production update and disappointed on volume: Pilbara operations First quarter production of 71.1 million tonnes (Rio Tinto share 57.3 million tonnes) was 12 per cent higher than the same period in 2014 following commissioning of the Nammuldi wet plant and the ramp up of Hope Downs 4. First quarter production

18

Capt’ Glenn too late the hero

By Leith van Onselen In his speech last night to the American Australian Association luncheon, RBA Governor, Glenn Stevens, called for help from policy makers in managing the macro-economy, noting the clear short-comings of monetary policy [my emphasis]: To this point, the balance that the Reserve Bank Board has struck has seen the policy rate

8

“Insane” RBA has lucid moment, in America

Captain Glenn Stevens followed a recent RBA tradition of reserving intelligence for international audiences in a New York speech last night. I have bolded the important parts for interest rate calculations. The World Economy and Australia Glenn Stevens* Governor Address to The American Australian Association luncheon, hosted by Goldman Sachs New York, USA – 21

64

Holden chops jobs

From News: So far this year sales of the Holden Commodore are down by 17 per cent and deliveries of the Cruze small car are down by 5 per cent in a market that has just posted the strongest first three months on record. Staff numbers will fall from 1530 production line workers to 1260

2

Daily iron ore price update (CISA)

Here are the iron ore charts for April 21, 2015: Spot firmed with Tianjin benchmark up 10 cents to $50.80. But paper weakened with Dalian down yesterday and even further over night, currently trading at 381. 12 month swaps rolled and Rebar average also broke lower. Reuters has texture: The 100 basis point reduction in

1

Daily LNG price update (spot crash)

The Brent oil price fell last night to $63.40 after Saudi Arabia declared record production. Even so, prices rebounded off lows and still look primed for more technical upside. Speculators are going long with plenty of room to move to the upside: However, I still do no expect it to last. Shale producers are still