Three year low for China PMI

The official China PMI is out for November and sank to a three year low of 49.6. Everything fell: It’s a competition between whether internal or external demand is falling faster. Remember that the various components of Chinese manufacturing represent 30% of steel consumption and there is nothing good going on here. Services were better rising

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GDP partials mixed

From Westpac: Q3 net exports:  1.5ppts Net exports will add 1.5ppts to Q3 GDP. This exceeded expectations (mkt median 1.2ppts, Westpac 1.3ppts). Export volumes rebounded by 4.6%, to be 6.5% above a year ago (Westpac 4.4%qtr). Import volumes contracted by 2.4% (Westpac -2.0%qtr). The terms of trade declined by 2.3% to be 10.4% lower than


Australia’s terms-of-trade falls to new 9-year low

By Leith van Onselen Within today’s data dump of balance of payments data that feeds into tomorrow’s national accounts release for September was the important news that Australia’s terms-of-trade has fallen another 2.3% (seasonally adjusted) and 2.9% (trend) over the quarter to be down by 10.4% (seasonally adjusted) and 10.9% (trend) over the year (see


Unit approvals power past house approvals

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released dwelling approvals data for the month of October. At the national level, the number of dwelling approvals rose by a seasonally adjusted 3.9% to 19,652. The overall lift was driven by the volatile unit and apartment segment, which jumped by 10.6% in October.


PC: Family home must be in pension assets test

By Leith van Onselen The Productivity Commission (PC) has released a new research paper, entitled Housing Decisions of Older Australians, which examines the factors influencing the housing choices made by older Australians along with the intersection between the tax and transfer system. The Paper finds that “the vast majority of older Australians are living in


RP Data: Rental yields off canvas after price falls

By Leith van Onselen Following on from my post yesterday on RP Data’s daily dwelling values index results for November, Core Logic-RP Data has released its full results, which also cover the smaller capitals and regional areas (see next table). As you can see above, the smaller capitals and the regions had a mostly poor


Manufacturing PMI firms

From the AIG: The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI® ) improved by 2.3 points to 52.5 points in November, indicating a net expansion across the manufacturing industries. (Readings above 50 points indicate expansion). § November was the 5th consecutive month in which the Australian PMI® has been above 50 points


Gotti issues “Triguboff warning”

From the always shameless Gotti: Australia’s largest apartment owner and developer, Meriton’s Harry Triguboff, has issued an Australia-wide danger alert to all those involved in the dwelling market including owners, buyers, banks and politicians at the local, state and federal levels. If the Triguboff warning is not heeded, there could be some nasty losses, including in bank loans.


Lomborg: Your new climate correspondent

The loon pond has struck back today with PM Turnbull capitulating to his foaming internal opposition, from BS: Prime Minister Malcolm Turnbull won’t sign an international agreement to phase out fossil fuel subsidies amid concerns it could jeopardise Australia’s diesel fuel rebates. Mr Turnbull has opted out of signing the key fossil fuel subsidy reform


Varoufakis: Australia headed for recession

From Fairfax: “There will be a recession in Australia, because of the collapse of investment and because of the collapse of animal spirits – and this is because of what’s happening in China,” he said. In that scenario, a short, sharp shock would be preferable to the entrenched, or secular, low or zero growth pattern


Hedgie: Oz house prices are gonna crash

Check out this report by APT Capital Management: Australia’s Housing Bubble. Is the luck running out? While numerous aspects of Australia’s economy have experienced something of a setback in 2015, the housing market is surging on with all cylinders firing. As is clear from the chart below, prices have been rising fairly steadily for some time and


Shadow RBA says hold

From THE SHADOW: No Need for Holiday Season Rate Cut The big drop in the Australian unemployment rate grabbed the headline this week. Headline inflation, at 1.5% (year-on-year) below the RBA’s target band of 2-3%, remains well contained and GDP growth, at 2% annualized, soft. The CAMA RBA Shadow Board on balance prefers to keep


D&B business expectations dreamin’

Dun and Bradstreet business expectations for November are out and show what tripe the RBA has been spouting. Business expectations, which we’ll take a proxy for confidence, remain very high but sadly actual conditions are only OK and fading. Hopes for sales are near the moon but the realty is meh: Hopes for profits are


Capital Economics is wrong on iron ore (and China)

In a note on Friday Capital Economics reassured investors that although iron ore is going to drop below $40 it won’t stay there for very long as supply closes. Moreover, commodities economist John Kovacs said that with prices approaching big miner breakeven costs and the Samarco debacle, as well as a small rise in demand next year will


Links 1 December 2015

Global Macro / Markets / Investing: Secular stagnation and the financial sector – Crooked Timber Sovereign wealth funds in the new era of oil – VOX World’s Biggest Pension Fund Loses $64 Billion Amid Equity Rout – Bloomberg Negative interest rates don’t work – philosophyofmoney.net Morgan Stanley: Get Ready for a Period of Low Returns


ASX at the close

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets A weaker CNY midpoint fixing and a renewed selloff in Mainland Chinese markets have heightened fears that Friday’s selloff could merely be the beginning of a more significant correction for Chinese equities. Although the Chinese “National Team” looked keen to quell potential fears over