Latest posts

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Big iron equity stiffens chin into knockout

Big iron equity continues its spectacular outperformance versus its actual business today with more paltry falls versus the calamity unfolding in the price of dirt. BHP is down 0.5% and RIO only 1.4%. The former is still 10% above its December low and RIO 5% above its despite iron ore being 30% lower now. To the

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More record lows for Aussie bond yields

As US and Australian data fades in tandem, the Australian bond bull market has strapped on the afterburners and yields are getting trashed. The two year hit an all-time low of 1.67% last night is now trading at 1.69%. The 5 and 10 years also hit all-time lows and now trading at 1.84% and 2.31% respectively:

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Falling AUD saves the Aussie tourism industry

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released trade data for the month of February, with Australia recording a seasonally-adjusted trade deficit of $1,256 million. The result just beat analyst’s expectations, who had expected a trade deficit of only $1.3 billion. It was the eleventh monthly trade deficit in a row

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Job vacancies follow the bubble

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released job vacancies data for the February quarter, which recorded a 0.7% seasonally adjusted increase over the quarter, and a 1.2% rise in trend terms: Over the year, job vacancies rose by 6.2% seasonally adjusted and by 6.3% in trend terms. Changes in vacancies

4

TD monthly inflation bounces

TD Securities’ monthly inflation rose 0.4% in March and 1.5% over the past year. The trimmed mean rose 1.6%. Annette Beacher said: “While low inflation certainly allows the RBA to cut the cash rate further, we pencil in only one more cash rate reduction to 2 per cent in May, with risks of delay into the

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Wealthy Aussies’ super, pensions in the cross-hairs

By Leith van Onselen It seems the days of giving wealthy older Australians a free Budget ride are coming to an end, with both Labor and the Abbott Government strengthening rhetoric against superannuation concessions for the wealthy, and the Coalition flagging that it will tighten the assets test for the Aged Pension. On superannuation, Labor

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CBA demands government fix confidence

It’s still early in the bust but jeez it’s already getting perverse. From Dad’s Army: The Commonwealth Bank has launched a fresh call for the federal government to develop a long-term plan to tackle the major economic threat posed by sagging confidence levels. Australia’s biggest lender says volatility in the global economy, and in particular

14

Twiggy blusters

From Twiggy Forrest via Junket Jen at the AFR: “When has market share strategy over shareholder returns ever helped a company? What BHP and Rio are doing is buying – at massive cost – expansion capacity even when the higher commodity price justification for such investment has evaporated. It’s as though they are stuck in a

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Saul Eslake: RBA “insane”

From the AFR: “Albert Einstein is supposed to have said the definition of insanity is doing the same thing over and over again and expecting a different result,” Saul Eslake, Bank of America Merrill Lynch chief economist, said. “I’m not accusing the RBA of being insane, but I wonder what they think they can achieve

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Macro Morning: April Fool

by Chris Becker April Fools Day surely sucked in a few more punters on the worldwide asset scramble in the face of seemingly endless stimulus emanating from central banks. But the flies are gathering in the ointment as the macro data rolls through showing a slowing in the 7 year economic cycle, post-GFC. Although only

14

The Budget takes another hammering

By Leith van Onselen The falling iron ore price is expected to wipe billions from Budget revenues, increasing pressure on Treasurer Joe Hockey. As reported in The Australian today, Deloitte Access Economics ­director, Chris Richardson, has estimated that the iron ore price plunge below $US50 a tonne could wipe $3 billion from forecast revenues by

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The great Australian bust is upon us

Don’t kid yourself, the iron ore crash is the end of the great Australia boom and the beginning of the great Australian bust. Australia’s terms of trade are being put to the sword and worse is ahead. Iron ore will be at $30 by year end and the two coals will fall in sympathy though much

4

Falling commodity prices to crush national income

By Leith van Onselen The RBA has released its commodity price index for March, which registered another 1.7% fall in SDR (currency weighted) terms – the key determinant of the terms-of-trade – and a 2.8% fall in Australian dollar terms: Preliminary estimates for March indicate that the index declined by 1.7 per cent (on a

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RIO’s fat tail

It is a revealing fact about market sentiment that Australia’s large LNG players are trading reasonably healthily based upon the forward curve in the oil market. Because oil is seen rebounding in the outer years, that’s an excuse to not write down assets and raise capital. At the same time, however the forward curve in iron

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Daily LNG price update (Iran fail)

Brent oil took off again last night up 3% to $56.90 as I write night with the oil market enjoyed a double win as Iran talks stalled and US production fell. On the first, the talks are not dead, via the BBC: The UK says key issues still need to be tackled at talks on Iran’s

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China house price declines ease a little

Cross-posted from Investing in Chinese Stocks. CREIS reports prices in its 100 city index fell 0.15% in March, down from the 0.24% decline in February (in January, CREIS reported an increase in prices). Prices increased in 43 cities, declined in 55 and were flat in 2 cities. That’s up from 61 cities with falling prices

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Links 2 April 2015

Global Macro / Markets / Investing: Why are interest rates so low, part 3: The Global Savings Glut – Brookings Investors Across the Globe Join the Party – Wall Street Journal Reckoning Arrives for Cash-Strapped Oil Firms Amid Bank Squeeze – Bloomberg Sam Zell: Why a stock correction could be coming – CNBC Forex reserves