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Time to pull Australian dollar shorts?

From the AFR comes RBS’s head of macro strategy in Asia, Greg Gibbs: …”Even though iron ore prices have been relatively stable since the last RBA meeting… the broader theme around commodities is quite soft,” said Mr Gibbs. “There’s a general bearishness around commodity currencies.” “It does suggest that the data is not all that bad and there’s not

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Australia’s June quarter trade deficit shocker

By Leith van Onselen The Australian Bureau of Statistics (ABS) today released trade data for the month of June, with Australia recording its biggest quarterly trade deficit in the post-GFC era. In the month of June, the trade deficit deteriorated to $2,933 million. The result still beat analyst’s expectations, however, who had expected a trade

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MSM pump primes RIO dividend

From the AFR: When Rio reports this week, analysts’ consensus is for underlying earnings to shrink to $US2.4 billion, from $US5.1 billion in the year-earlier period. …Despite the cash flow squeeze, Deutsche mining analyst Paul Young says savings from expected cuts to capital spend, from an already reduced target of $US7bn, and continuing cost cutting “should underpin another buyback in February 2016″. Rio

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China trains new gun on shorts

From Reuters: The Shanghai and Shenzhen exchanges said in separate statements on Monday night that the rules, effective immediately, would prevent traders from borrowing and repaying stocks within a day. China’s exchanges and markets watchdog are cracking down on short-selling as part of a broad government-orchestrated effort to prevent a collapse in its markets, which

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Consumer confidence holds at average

By Leith van Onselen The ANZ-Roy Morgan Research consumer confidence index continued to recover in the week ended 2 August, rising 0.4 points to 112.9 to be tracking around the long-run average of around 113 points (see next chart). Three of the survey’s five components improved over the week, with family finances up 3.61% to

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Abbott rains defence pork on South Australia

By Leith van Onselen In April last year, Treasurer Joe Hockey declared an end to industry assistance and warned that “no country has ever subsidised its way to prosperity”: The difficult decisions that will underpin our movement to a new age of responsibility must also include the corporate sector. Too many taxpayers’ dollars have been

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Foreigners sour on Aussie bonds

From the WSJ, on international investor’s waning enthusiasm for Aussie government bonds: The love affair is now cooling as investors sense the end of the global low-rate era. The U.S. Federal Reserve, in particular, is widely expected to raise rates from near zero as soon as September, a move likely to ripple through global bond

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Obama hammers Australian LNG

From the FT: US shale gas is the unexpected loser from President Barack Obama’s climate plan, as the White House abandons its previous enthusiasm for natural gas as a cleaner alternative to coal. …In its landmark plan to cut greenhouse gas emissions from power plants, the Obama administration eliminated an earlier projection that natural gas

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Macro Morning (risk awwf)

By Chris Becker Risk appetites are tightening across stock markets as the latest ISM Manufacturing Index print last night and as oil prices continue to fall. A lack of inflationary pressures and stable wages are being reflected in bond markets as lower interest rate rise expectations. Greek financial markets opened for the first time in weeks and

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No, Kouk, Bozo Joe will not be smiling

From the Kouk: The federal budget is less than three months old and already Treasurer Joe Hockey and Finance Minister Mathias Cormann must be smiling like Cheshire cats with several of the key economic parameters stronger than assumed by Treasury in May. The budget bottom line will be getting a revenue wind-fall from the fact

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No fire sale for AOFM RMBS

From Banking Day: The Australian Office of Financial Management will not conduct a fire sale to meet the Government’s deadline for divestment of its holdings of residential mortgage-backed securities. In the May Budget the Government announced that the AOFM would divest its RMBS holdings, valued at A$4.6 billion at the time. The AOFM’s plan is

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Roy Morgan unemployment 8.7% in July

By Leith van Onselen Roy Morgan Research (RMR) has released its unemployment estimate for the month of July, which registered a 0.6% fall in the unemployment rate to 8.7% from 9.3% in May. Unemployment was also down 1.5% over the year (see next chart). Here’s a summary of the release: 12,673,000 Australians are in the

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On Chinese capital flight

From UBS via FTAlphaville: We think that the unwinding of earlier foreign exchange liabilities and “arbitrage inflows” by domestic entities have contributed significantly to the recent large outflows. In the few years before Q2 2014, especially during much of 2013 and early 2014, as the expectation of RMB appreciation had been strong and the onshore-offshore

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Links 4 August 2015

Global Macro / Markets / Investing: How Libor whiz Rain Man became the guy everyone was going to blame – Reuters Review: ‘The Economics of Inequality,’ by Thomas Piketty – New York Times El-Erian: Why gold has lost its shine for investors – Financial Times One of tech’s biggest investors told us why he thinks

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ASX at the close

Chris Weston, Chief Market Strategist at IG Markets A new week and a new month and there will be many in the market happy to see the back of July, although developed market equities generally did well. The key thematic we have been detailing of late has been an increasing focus on the start of