How to save the Coalition

ScreenHunter_5848 Feb. 02 06.35 By Leith van Onselen With the Victorian and Queensland Coalition Governments obliterated, and Tony Abbott facing an imminent leadership challenge, the odds that the Federal Government will become one terms wonders are increasing by the day. As argued by The Guardian's Lenore Taylor over the weekend: [Tony Abbott]...has squandered the electorate’s trust, with broken promises and harsh policies not mentioned before the election... [He] thought slogans, rather than explanations, would convince voters... Spot on. If you want a textbook example of how not to run a Government, Tony Abbott's would...
read more

Australia rejects the “loon pond”

no_fox_news_157 Dead Duck Tony is about to depart the Australian prime ministership. The QLD election result makes any excuses, reboots, turns left or right, untenable. The only question now is what lesson will the Federal party take from the VIC and QLD polls, which will determine the replacement. If they think it is a messaging problem then they'll aim to promote one of Tony's "loon pond" right wing allies - a Scott Morrison, Eric Abetz, Christopher Pyne, Andrew Robb or Joe Hockey etc. That'll mean a new face on old policies. The argument, or instinct, will be that having wall-to-wall favourable coverage in...
read more

Markets drawing breath for taper tantrum 3.0?

screaming_baby Awesome chart here from Investing in Chinese Stocks: Either we're changing the pattern or volatility (read selling) lies dead ahead. If your looking for a more specific trigger, Goldman Sachs offers one: Revenue results are correlated to dollar strengthening, which has led to weaker revenue results and lower forward guidance that incorporates the FX headwind. Anecdotally, management commentary implies the dollar strengthening will lower revenue growth by 300-500 bp. Foreign sales accounted for 33% of aggregate revenue for the S&P 500 in 2013. Based on our earnings model, a 10%...
read more

Time to tighten, APRA

hand-holding-whip-hi In December APRA drew a line in the sand for property investment loan lending in which it declared it would consider raising capital charges for any bank growing its investor mortgage book above 10%. Well, time to act, APRA, from the AFR: NAB's growth was led by loans to investors, which grew 2 per cent above APRA's cap at 12.4 per cent, twice its loan growth to owner-occupiers. ...Macquarie Bank has recorded by far the fastest growth in home lending of any institution...For the year to December, its loans to owner-occupiers rose by 62 per cent and to investors by 107 per cent. However, the growth...
read more

Martin: RBA will cut

imgres From Peter Martin whose sources are good and whose style tells you when he's using them: Concern about deteriorating economic growth lies behind the Reserve Bank's determination to cut interest rates, a move most likely at its first board meeting for the year on Tuesday. ...The bank's previous forecast of rising economic growth published in November is now regarded as out of date and will be revised when new forecasts are issued on Friday. ...The bank believes that enough has changed since December to release it from the commitment. The oil price has collapsed, economic growth has weakened, and...
read more

RP Data: Home prices up 1.3% in January

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen RP Data's price results are in for January, with the daily index recording a 1.28% Rise over the month at the 5-city level, with Melbourne and Sydney leading the way (see next chart). It was the second monthly rise in values since the unexpected fall in November, with values up by 1.92% over the quarter (see next chart). Price growth appears to be well past its peak, however, with annual growth trending down nationally and across most major markets (see next chart). Values are now 13.5% above the October 2010 peak at the 5-city level, with values in all...
read more

Australia turns Japanese

9064773-origpic-c85e8f The inexorable march away from "Australia is different" continues. Over the weekend, Australian bond yields were positively hammered and sit this morning at record lows across the board: The rampaging global bond bull market has taken Australian 2 year yields decisively below 2% for the first time, 5 year yields to the threshold of 2% for the first time, and 10 year yields to a full 10bps below the cash rate at 2.4%, another record low. This gives you some idea of how far behind the curve the RBA cash rate is in terms of market pricing. Bonds see the RBA having to cut the cash rate for...
read more

Daily iron ore price update (deck shunt)

anvil Here are the iron ore charts for January 30, 2014: Not that equities care, with everything flying Friday and then again in London, but the iron ore and steel price deck is shunting lower once more. Rebar average just can't stop falling and the angle of decent is the steepest since the 2012 property bust. This time, however, there's no big save coming. Spot is following with Qingdao at a new post 2009 low. Paper markets are mixed with Dalian 6 month futures strangely calm but still only a hair's breadth from a new low while Singapore 12 month swaps have jumped off the top of United Overseas...
read more

Daily LNG price update (US gas challenge dead?)

3445 The Brent oil price piled it on Friday night, up 7% to $52.42. The price was flat all night until Baker Hughes released its weekly US oil rig count which crashed 90 to 1543: The indicative LNG contract price jumped to $7.65mmbtu: Meanwhile, the LNG spot price has finally caught up with the contract crash and traded at $7.45mmBtu last week: The WSJ muses on the combined markets: “There is so much uncertainty in the market as to where crude is going in the next one or two years that it’s going to be very hard to find a comfortable [LNG] price mechanism that both the buyer and...
read more

China official PMI contracts

Capture China released its official January PMI over the weekend and the news was more slowing with the headline sliding three points into contraction at 49.8, new orders were down 2 points and barely expanded at 50.2 and new export orders dropped 7 points t0 48.4. Here's the chart: As you can see, the same time last year exhibited a similar sliding trajectory though we're already lower than then. In 2013 the index was turned up by a renewed infrastructure push. We've already seen that in the past few months so the index may hold up from here. However, last year did not include the structural...
read more

China new home prices bounce

China-slowdown Cross-posted from Investing in Chinese Stocks. 44 cities up, 56 cities down in the January 2015 CREIS report. The overall increase in January was 0.21% mom. New home prices in the top ten cities saw an increase of 0.59%. However, the top ten cities also saw existing home prices fall 0.53% in January. Beijing was the extreme example: new home prices increased 1.15% and existing home prices fell 0.74%. The result comes after local governments in China threw everything, including the kitchen sink, at the real estate market in January. Buying restrictions are gone, taxes are cut,...
read more

Yanis pwns the BBC

1 More power to Greek FinMin Yanis Varoufakis who refuses to be railroaded or pigeonholed by the Troika or its journalist apologists. There's more reason in this interview than in five years of European crises (and probably since 1999 when the busted euro project was born). Meanwhile, the ECB is saber-rattling, from Reuters: A deal on extending Greece's bailout deal must be found by the end of February or the European Central Bank will not be able to continue lending to its banks, ECB council member Erkki Liikanen said on Saturday. Europe's bailout programme for Greece, part of a...
read more

Links 2 February 2015

ScreenHunter_01 Apr. 02 06.19 Global Macro / Markets / Investing: Seven Reasons Cheap Oil Can’t Stop Renewables Now - Bloomberg Oil Cash Waning, Venezuelan Shelves Lie Bare - New York Times What sectors are cheap? Energy and consumer discretionary -  Alpha Architect What successful short-sellers look for in a shortable stock - Contrarian Value Edge Rising interest rates and the risk of 60/40 portfolios - A Wealth of Common Sense Don't ignore the slope of the yield curve - Economics 21 North America: US plays catch up on harvesting offshore wind power - qz.com Q4 GDP was disappointing but the private sector...
read more

Weekend Links 31st Jan – 1st Feb 2015

reynard Global Macro/Markets/Commodities I Do Not Think That Number Means What You Think It Means - Krugman Worst-Case Scenario: Everything Can Go Wrong This Year - Bloomie Fanatics, Charlatans, and Economists - Project Syndicate Oil-Price Slide Hits LNG Markets - WSJ Asia/China China Further Tightens Grip on the Internet - NYT Chinese universities ordered to ban textbooks that promote Western values - SCMP New Rules in China Upset Western Tech Companies - NYT ‘US sleeping as China courts Thailand’ - Thai Visa Pakistan and India: the Tension Grows - NEO Europe/UK Russia...
read more

ASX at the close

ScreenHunter_31 Jun. 04 16.42 Chris Weston, Chief Market Strategist at IG Markets It’s a good day to be an equity bull. European and US markets look set for a renewed tilt at recent or all-time highs, while the Nikkei has found good buying and looks set to test the top of its recent range at 18,000. Even the Greek market has seen a modest rebound and, while there have been articles about Greece having no choice but to leave the monetary union, there is also an argument that the current program of structural reform will be maintained. ASX 200 looking strong Locally in Australia the ASX 200 is a pillar of strength and...
read more

Bill Evans: RBA to cut next week

unnamed Fresh from Westpac's Bill Evans: The Reserve Bank Board meets next week on February 3. Since we changed our view on December 4 last year we have consistently argued that the board will decide to cut the cash rate by 25bps at this February meeting. In the discussion below we set out the reasons why we have retained that view. In last week’s note we highlighted the relevance of the December quarter inflation report as an important input to the policy decision. The report showed a slightly higher quarterly print on both headline and underlying inflation. We expected 0.1% on the headline and 0.6%...
read more

Investors see rising mortgage risks

ScreenHunter_5841 Jan. 30 14.53 Cross-posted from MARQ Services Morgij Analytics has this morning released a survey of institutional investors and other financial market participants taken in the latter part of 2014 to gauge respondent’s views of the drivers for Australian housing and mortgage markets for 2015 and beyond. Survey participants were asked to rate 20 drivers of Australian housing and mortgage markets and the overall index showed a mild negative bias coming in at -1. A level below 0 reflects the likelihood of increased risks in Australian housing. Graham Andersen, Chairman and Founder of Morgij...
read more

Comrade Campbell to lose and launch coup?

images From Crikey: Barring a last-minute turnaround, it looks likely that Campbell Newman will lose his inner-city Brisbane seat of Ashgrove. However, as our very own William Bowe has predicted, his party looks set to win the election. And theoretically, that means he could remain premier of Queensland. A column in The Conversation by constitutional lawyer and Sydney University professor of constitutional law Anne Twomey has quickly made a splash after suggesting there was no legal reason Newman could not continue as premier. The argument goes like this: calling an election doesn't mean the position of...
read more

Bloxo wavers

Big_smile From the happy warrior: Australia’s rebalancing act is underway; low interest rates are already working and the lower AUD should lift growth At the same time, inflation is low, which leaves the RBA with scope to consider rate cuts, although the trade-off is the risk of over-inflating an already booming housing market We still see the RBA holding rates steady next week, but given recent cuts by other global central banks, it is a close call, and a rate cut is certainly a possibility To cut or not to cut, that is the question Whether the cash rate will be cut again or not is being hotly...
read more

Iron ore miners rally on as futures stall

123 The big miners are all up again today on the back of a rising market and ongoing FMG hope. BHP and RIO are up firmly but FMG has powered another 5%. Here are the indexes: The RIO idiocy spread is at lunatic wides: No change in the junior mausoleum: Dalian stable at plus 1...
read more

Lower petrol prices worth two rate cuts

ScreenHunter_04 Sep. 23 15.14 By Leith van Onselen There's a lot of commentary today suggesting that lower petrol prices are providing a benefit to households equivalent to up to two rate cuts. From The AFR: Deutsche Bank says households are receiving a $7 billion boost from lower petrol prices. "That's equivalent to more than 50 basis points of interest rate cuts, or roughly 2 per cent of retail trade and 1/3 the size of the Rudd government stimulus payments," Deutsche analysts write in a note... Bank of America Merrill Lynch's Saul Eslake [says] the fall in petrol prices equates to a sizable rate cut. "Retail petrol...
read more

Valemax welcomed in China

images From Reuters: Ships in the Valemax fleet of 400,000dwt fleet of ore carriers have been allowed to dock at five ports in China as a ban that had been in place since 2012 is relaxed. Vale investor relations chief Rogerio Nogueira said the Brazilian miner was working to increase the number of ports open to its ships. The Chinese port ban had stymied Vale’s efforts to reduce freight costs and compete with Australian based-rivals such as BHP Billiton and Rio Tinto. With oil and this, Vale is powering down the cost...
read more

Another bumper month for home loans

ScreenHunter_06 Jun. 26 22.42 By Martin North, cross-posted from the Digital Finance Analytics Blog APRA just released their monthly banking statistics, which provides a view of lending and deposit portfolios from the banks (ADI’s). Overall home lending by the banks rose $9.12 billion to $1.315 trillion. Owner Occupied loans grew by 0.59% and Investment Loans by 0.9%, with Owner Occupied Lending now accounting for 65.1% of the loan book (down from 65.2% last month). Looking in more detail at the individual bank data, we see that CBA maintains its leading position in the Owner Occupied sector, whilst WBC leads the Investment...
read more

PPI confirms benign inflation

ScreenHunter_5834 Jan. 30 12.06 By Leith van Onselen The Australian Bureau of Statistics (ABS) today released Producer Price Index (PPI) data for the December quarter, which has registered a 0.1% quarterly increase in final (stage 3) prices and an increase of only 1.1% over the year: The 0.1% increase in final (stage 3) prices was driven primarily by increases in the prices received for building construction (+0.6%), other transport equipment manufacturing (+5.8%), and computer and electronic equipment manufacturing (+5.5%), partly offset by falls in the prices received for petroleum refining and petroleum fuel...
read more

Investor mortgage growth hits double digits

ScreenHunter_12 Sep. 23 12.54 By Leith van Onselen The Reserve Bank of Australia (RBA) today released its private sector credit aggregates data for the month of December: A chart showing the long-run breakdown in the components is provided below: Personal credit growth (0.0% MoM; 0.1% QoQ; 0.9% YoY) remains in the gutter, whereas business credit growth (0.5% MoM; 1.4% QoQ; 4.8% YoY) and housing credit growth (0.6% MoM; 1.8% QoQ; 7.1% YoY) continue to accelerate, but remain below their long-run average growth rates (although housing credit is still growing more than twice as quickly as wages and off a very large...
read more
Page 1 of 78112345...102030...Last »