Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets Asian markets followed Europe’s lead downwards as concerns over Turkey’s downing of a Russian jet seemed to add to ongoing market concerns. While the dispute between Turkey and Russia is unlikely to escalate into a “hot” conflict, it does underline the unresolved tensions over
From the McGrath prospectus via the AFR: Harcourts managing director Mike Green said the comparison was designed to make McGrath, a business based in Sydney’s pricey eastern suburbs, look good. “To rank your agency based on the dollar value of property sold is not entirely reflective of your position in the Australian market,” he said.
From Westpac: The Westpac MNI China Consumer Sentiment Indicator (hereafter the CSI) rose 3.3pts from 109.7 in October to 113.1 in November. The CSI is now up 1.9% on a year ago but still 6% below its long run average. The Index is in line with the average recorded over the last 18mths. This follows
From Goldman: Metals prices have declined by 12%-17% since late October. Over this period, China’s economic data for October has disappointed, the US dollar has strengthened on a trade weighted basis, and the broader commodity complex has moved lower, including most notably, energy prices. What has also occurred since late October has been an eye
I must be the only one left in this industry with a few ethics (not that the press could ever have written itself a glowing reference), from the AFR: It is a serious climb to the top of the Fortescue Metal Group’s wet ore processing facilities, which stand 60 metres off the ground, deep in the belly of
S&P has released its new BICRA scores for countries and Australia come out OK: Standard & Poor’s Ratings Services classifies the banking sector of Australia (AAA/Stable/A-1+) in group ‘2’ under its Banking Industry Country Risk Assessment (BICRA). Some of the other countries in group ‘2’ are Canada, Germany, Hong Kong, Japan, Singapore, Sweden, and Switzerland.
By Leith van Onselen The ABS has released data on the value of construction work done for the September quarter of 2015, which registered a seasonally-adjusted 3.6% slump in total construction activity over the quarter and a 3.7% decline over the year. The 3.6% quarterly fall in construction activity was driven by engineering construction (mostly
From Westpac: The ABS survey of private business investment plans, the CAPEX survey, will provide some further guidance to growth prospects. The September quarter edition will be released on November 26, with responses received over October and early November. This update will include Estimate 4 of capex plans for 2015/16. Here we provide scenarios for
By Leith van Onselen In 2005, former Treasurer Peter Costello implemented the mother of baby boomer bribes in the form of the “transition-to-retirement” (TTR) rules, which allows those aged over 55 to legally minimise their tax by salary sacrificing up to $35,000 into a superannuation account (thus paying 15% contributions tax) and then simultaneously withdrawing
From Society Generale: Brexit at a probability of 45%, remains our highest probability risk. At this time, a date has yet to be set for the referendum but 3Q16 seems a likely timing, based on the idea that Prime Minister Cameron will want to hold the referendum within a reasonable timeframe on concluding an agreement
By Leith van Onselen The release on Friday of the State Accounts, along with other recent data releases from the ABS, have well and truly shattered the WA Government’s Budget projections, which were built on delusions of grandeur. The key assumptions underpinning the 2015-16 Budget are illustrated below, with the iron ore forecasts highlighted in
The Aussie is ripping again today, even as commodities threaten the third level of Hell (on their way to the seventh): It’s powering against the US dollar, launching against the euro and well outdoing the other commodity currencies. I could go into the five drivers again but there isn’t much need. This is largely a technical
by Chris Becker A Turkey shoot overnight translated to a wobbly session in European stocks while oil spiked alongside other commodities as US dollar strength. Yesterday’s data dump began with a firming Japan manufacturing PMI that put a bid underneath Yen, while in the US consumer confidence slumped even as house prices registered solid gains in the face
Captain Glenn spoke last night and here it is. The Long Run Glenn Stevens* Governor Address to the Australian Business Economists (ABE) Annual Dinner Sydney – 24 November 2015 Thank you for the opportunity to address you this evening. You’ve spent all afternoon talking about the near-term outlook. No doubt there was a lively discussion
By Leith van Onselen The Turnbull Government has released its response to the Competition Policy Review (‘the Harper Review’), accepting in full or in principle 39 of the 56 recommendations and partly accepting a further five, while pushing the controversial recommendations to change the law on companies abusing their market power and on liberalising pharmacy
Blow me down with a feather, from Macquarie: Credit ratings at risk BHP and RIO have both stated a wish to maintain a solid A rated balance sheet. A detailed analysis of the credit rating methodologies suggest that the solid A credit ratings for both companies are at risk, with BHP’s A+ rating almost certain
From Credit Suisse: New economy leading the labour market. ABS data suggest that the bulk of job creation has occurred in “new-economy” sectors such as healthcare and professional, scientific and technical services. Indeed, these sectors account for roughly 80% of the 232K jobs created in 2015 to date. In contrast, “old-economy” sectors, such as mining,
What’s causing iron ore to fall and where will it bottom asks Dumbfax today: 1. US RATE RISES 2. CHINESE GROWTH 3. CHINESE ECONOMIC CYCLE 4. ROY HILL ANY POSSIBLE BULLISH INFLUENCES? 1. BHP’S SAMARCO DISASTER 2. CLOSING OF SMALL PRODUCERS 3. UNEXPECTEDLY GOOD GLOBAL GROWTH And the truth: US rate rises and a rising US dollar are
By Leith van Onselen The Grattan Institute has delivered another excellent report entitled Super tax targeting, which argues that the Budget could save a combined $6.6 billion a year by better targeting superannuation contributions (saving $3.9 billion a year), along with implementing a 15% tax on the earnings of retirees (saving $2.7 billion a year).
The Turnbull Budget is under assault. Yesterday we had Treasury’s Nigel Ray on growth potential: There was criticism of the Budget that the projections for real GDP growth over the medium term were too high. Some have suggested these projections were raised in order to improve the Budget position. Can I say at the outset
By Leith van Onselen Among all of the factors that drive house price growth, arguably the most important is the flow of housing finance commitments, which has shown an incredibly strong correlation over the past several decades (see next chart). On Friday, the ABS released its State Accounts for the year ended June 2015, which
From Goldman: In many ways our 2016 forecast is “déjà vu all over again.” The US stock market has mostly traded sideways during 2015 with the index hovering in a narrow band except for a brief late summer correction. Return dispersion across the market and within sectors has been low. Market breadth is currently at
From AEP: Known to traders as Dr Copper, the metal is tracked as a barometer of health for the world economy but has increasingly become a rogue indicator. China consumes 45pc of the world’s supply, distorting the picture. Beijing is deliberately winding down its “old economy” of heavy industry and break-neck construction, switching to a