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Weekend Links 30-31 May 2015

Macro, Markets & Investing The Federal Reserve Board Is Much More Likely to Take Your Job Than a Robot, so Naturally the Media Are Talking About Robots – Dean Baker Bond Yields’ Broken Link with Growth – WSJ Foreigners pile into China stocks as red flags loom – FT Asia Major construction at North Korea rocket site,

Latest posts

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ASX at the close

Stan Shamu for Chris Weston, Chief Market Strategist at IG Markets Japan getting it done While attention remains pinned on China, Japan has been the quiet achiever in Asia with the Nikkei remaining at 15-year highs. The recent gains in the greenback have been the pinnacle of the rally, sending USD/JPY to 2002 highs. Data

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MB Radio: An Economy to Remember

  After the release of the 1Q 2015 Capex data by the ABS, Gunnamatta spoke with David Llewellyn-Smith and Leith van Onselen about the significance of the data for the national economy.  In a wide ranging discussion, they covered the outlook for aggregate demand, interest rates, and employment, and discussed how the economic outlook will

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Big iron rallies as dollar fades

Big iron is up today as the weak dollar and bond bid boosts shares. BHP and RIO are both up 1.5% but FMG is down 2% on the spot price sell off. To the indexes:   The idiocy spreads are still flat:   The juniors are stable but BCI is fading again:   Dalian futures

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Capital Economics: AAA doesn’t matter

From Capital Economics: It is possible that at some point in the next couple of years, Australia will lose its AAA credit rating. While this would be a huge blow for whichever political party is in power at the time, it wouldn’t be a big deal for the economy or the financial markets. The dollar is unlikely

2

Ghost city boom keeps on giving

HIA new home sales are out for April and keep on keeping on: In April 2015, total seasonally adjusted new home sales increased for a fourth consecutive month, inching 0.6 per cent higher. While this is the slowest growth pace of the four months, it is still a strong result off the back of a

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BTFD China!

Looks like for the time being at least the banana traders of China are running scared. Shanghai opened this morning and promptly crashed 4%. A little buying since Anyone for BTFD?  

2

Housing finance slows

By Leith van Onselen The Reserve Bank of Australia (RBA) today released its private sector credit aggregates data for the month of April: A chart showing the long-run breakdown in the components is provided below: Personal credit growth (-0.1% MoM; -0.2% QoQ; 0.6% YoY) remains in the gutter, whereas business credit growth (0.0% MoM; 0.8%

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Zero progress on MP tightening in April

APRA has released its April banking statistics and it’s a washout so far as macroprudential tightening is concerned. Of the big six banks only one slowed investor lending growth and it remains well above the 10%line anyway: ANZ CBA MAC NAB SUN WBC 10.5 9.5 74.8 13.9 12.1 10.3 Here’s the chart:   And including the

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UBS: Oz outlook from bleak to recessionary

Just so you don’t think I’m making it all up and the feel good bankers are right, from UBS: Outlook: 15/16 downgraded from already bleak to now recessionary -18% y/y Meanwhile, nominal capex intentions 6th estimate for 14/15 fell slightly to $150.0bn, below our expected rise to $152.3bn & a downwardly revised 5th est. of $150.8bn. Crucially,

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Greens finally give ground on fuel excise

By Leith van Onselen New Greens leader, Richard Di Natale, has confirmed that the Greens are negotiating with the Abbott Government to re-introduce the indexing of excise on petrol. From The AFR: The Victorian Senator, whose party wields the balance of power in the Senate, first met Mr Abbott during budget week and said “we’ve discussed a

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How bad is the coming Australian recession?

With an Australian recession now locked in let’s explore how bad it’s going to get. Our starting point is yesterday’s capex figures: That’s pretty scary stuff! And it will be almost as bad the year after, taking capex back to 2004/5 levels. It’s enough I’d guess to push the unemployment rate to 7.5% by the end

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RBNZ macroprudential will smash Auckland investor lending

By Leith van Onselen Data released by the Reserve Bank of New Zealand (RBNZ) has shown that the RBNZ’s planned changes to its loan-to-value ratio (LVR) macro-prudential controls, which take effect on 1 October, could have a major impact on New Zealand investor mortgage lending. Under the announced changes, residential property investors in the Auckland

6

Macro Morning (China cracks)

By Chris Becker The USD continued its pause overnight as the dual meme of Fed rate rises/Greek debt problems did the switcheroo with the latter dominating headlines and risk appetites as creditors announced they are no closer to a deal with the beleaguered state. Adding fuel to the fire was the one session crash in

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Construction won’t save employment, DEEWR

By Leith van Onselen The Department of Employment yesterday released a report looking at Australian construction employment, which is says is the third largest employer in Australia, employing 1,055,200 workers or 9.1 per cent of total employment. The industry has also experienced strong employment growth over the past decade, growing by 221,400 (26.6%) over the

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Coalition members pursue beef with TPP

By Leith van Onselen Several Coalition members have stepped-up their resistance to the Trans-Pacific Partnership (TPP) trade agreement, vowing to oppose giving potentially contaminated US beef access to Australia in exchange for Australians receiving increased sugar access. Liberal Senate agricultural committee member, Bill Heffernan, has been particularly outspoken against the TPP, with The Land reporting

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Daily LNG price update (spot cometh)

The Brent oil price rebounded last night to$6.85 as I write. The major reason was another draw on US crude inventories:   Even though production took off again: The Saudis were also bearish, from Reuters: Saudi Aramco may raise the number of its oil and gas drilling rigs to as high as 250 next year

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Daily iron ore price update (rejection)

Here are the iron ore price charts for May 28, 2015: Spot rejected new highs. Singapore dancing on a pin. Dalian eased but fell sharply overnight to 422. Rebar average resumed its slide into the abyss. Texture from Reuters: “At the moment, if you have any medium to high-grade material from Brazil or Australia, it will