ASX at the close

ScreenHunter_31 Jun. 04 16.42 Stan Shamu for Chris Weston, Chief Market Strategist at IG Markets It has been a choppy day for global markets with plenty of macro-economic activity to react to. In US trade, focus was pinned on the FOMC meeting minutes which were perhaps not as revealing as many expected, but still managed to give market participants some insight on the mechanics of rate normalisation. Overall, due to the lack of fresh insight, analysts mainly feel this implies the minutes were more dovish than anything else. The market seems to have been positioned for a hawkish shift in sentiment. In fact, the minutes showed...
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Australian cities plunge on expat cost-of-living index

imgres From Mercer: The survey covers 211 cities across five continents and measures the comparative cost of over 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment. The Americas Cities in the United States have climbed in the ranking due to the relative stability of the US dollar against other major currencies, in addition to the significant drop of cities in other regions which resulted in US cities being pushed up the list. A rise in the rental accommodation market pushed New York up 8 places to rank 16, the highest-ranked city in the...
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Atlas smashed as production soars

imgres This doesn't bode well for the forthcoming iron ore production reporting season. Atlas Iron released its quarterly update today, smashing production guidance and its share price. Here's the release: A record 3.1Mt (WMT) shipped during the June 2014 Quarter • 12Mtpa production target achieved ahead of time • A record 10.9Mt (WMT) shipped for FY2014, up 47% on FY2013 • Result beats previous full-year production guidance of 10.2Mt to 10.7Mt shipped • Annual result comprises 9.6Mt of Standard Fines and 1.3Mt of Value Fines • 63% increase in Standard Fines from FY2013 • Total 30Mt...
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More doubts over ACT light rail pork

ScreenHunter_06 Jun. 06 09.33 By Leith van Onselen The gloss continues to come off the ACT light rail project, with the Canberra Times reporting that the Tuggeranong Council, located deep in the city's south, has voted to oppose the light rail line connecting Gungahlin in the north and Civic, because it does not believe that residents located far away from the project should be levied to pay for it. Meanwhile, the Liberal opposition has raised more doubts about the rail line's viability, producing Census data showing that too few Canberrans live within walking distance of the proposed passenger stops to make the rail...
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NT town decimated as iron ore mine shuts

imgres From the ABC: The Northern Territory town of Pine Creek has been shattered by news that its biggest employer, the Frances Creek iron ore mine, will be shut down by November, with the loss of hundreds of jobs. Local business owners have told ABC Rural they were advised of the closure at a meeting with the company, Territory Iron, late last week, with residents from the Kybrook Farm Aboriginal community also informed of the shut-down. Mining services contractor Ray Woolridge attended the Pine Creek meeting, and says locals were told operations would start winding down at the mine...
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RP Data: Rental growth remains soft

ScreenHunter_3254 Jul. 10 13.43 By Leith van Onselen Following on from the release of Australian Property Monitors (APM) June quarter rental report (see here), RP Data has this afternoon released its own rental review for the June quarter, which revealed flat or negative house rental growth across all of Australia's capital cities, and below inflation annual house rental growth everywhere except Sydney and Darwin (see below table). According to RP Data: Quarterly movements: On a city-by-city basis for houses, Sydney, Brisbane, Adelaide, Darwin and Canberra all recorded no change in weekly rental rates, while...
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Inflation expectations still anchored

dgfws From Westpac today: The Melbourne Institute (MI) Inflationary Expectations are now reported as a 30% symmetric trimmed mean utilising all responses except for the ‘don’t know’ responses. These changes have added about 2ppt to the level of the index compared to the old trimmed mean (chart 6). But more importantly, the new series appears to express a greater cyclical amplitude (chart 7 & 8) which is useful in picking turning points in the inflation cycle. The consumer expected inflation rate fell by 0.2ppts to 3.8% in Jul. The trend of the trimmed mean series fell 0.1ppt to 4.0% in...
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Climate Clive back flips on carbon price

imgres From Crikey's Bernard Keane: ... in Clive Palmer, the Coalition faces someone who makes Abbott look like he has a maniacal obsession with consistency. The key to understanding Palmer is that he's always about what's ahead. What's in the past is irrelevant. The issue of consistency simply doesn't arise, because Palmer eternally moves forward, toward the next announcement, the next stunt. Clive only ever stops moving so he can momentarily bask in the media spotlight. Then it's onward again. Thus, with PUP-linked Ricky Muir now amenable to voting with the PUP today to end debate on the...
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Chinese trade firm but misses

China IE China's June trade figures are out and missed expectations. The trade balance was a surplus of $31.6bn versus expected of $36.95bn: Exports were up 7.2% year on year versus 10.4% expected and imports were up 5.5% year on year versus 6.0% expected: Nonetheless, you can see the early year weakness has passed (some of that was technical anyway) and both imports and exports are back on long term trend of falling below 10%. Iron ore imports fell 3.6% month-on-month to 74.57 million tonnes. This Chinese rebound is firm enough but nothing special and will fade in another quarter. The dollar...
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Unemployment in detail

ScreenHunter_01 Jun. 08 23.33 By Leith van Onselen As summarised earlier by Houses & Holes, the Australian Bureau of Statistics (ABS) today released labour force data for the month of June, which registered an increase in the headline unemployment rate to 6.0% from an upwardly revised 5.9% in May. The result disappointed analyst’s expectations of an unemployment rate of 5.9%. Total employment increased by a seasonally adjusted 15,900 to 11.578 million in June. The increase in jobs was driven by a 19,700 increase in part-time jobs, partly offset by a 3,800 reduction in full-time jobs. Aggregate monthly hours...
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NAB property insiders survey sees fading pulse

.oiio From NAB today comes the second of the big bank's quarterly property industry surveys. Like that of the ANZ is shows a fading pulse. NAB Residential Property Index falls in Q2 to its lowest print since mid-2013… VIC overtakes NSW as current best performing state with WA now clearly weakest. VIC and QLD most confident over next 1-2 years, with WA and SA/NT least optimistic. Growth tipped to be fastest in QLD (2.3%) and VIC (2.1%) next year, slowest in WA (0.2%). QLD (3.1%) and VIC (2.4%) strongest for capital gains in 2 years time. WA (0.9%) and SA/NT (1.7%) weakest. Rental growth slowed...
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Port Hedland expansion exposes West Pilbara folly

imgres From the West Australian: The constrained shipping channel at Port Hedland is the major drag on exports from the port. It is now capped at a theoretical limit of 495 million tonnes a year - a figure that puts a crimp on the expansion ambitions of Fortescue Metals Group, BHP Billiton and Gina Rinehart's Roy Hill project. Speaking at the Mining the Pilbara conference yesterday, Pilbara Ports Authority chief executive Roger Johnston outlined a raft of measures aimed at pushing Port Hedland's iron ore capacity beyond 495 million tonnes a year, confirming the Port was modelling a new theoretical...
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Unemployment lifts to 6%

images The Australian Bureau of Statistics has released its June Labour Force report and it's a decent report, just ahead of consensus: Employment increased 15,900 to 11,578,200. Full-time employment decreased 3,800 to 8,062,500 and part-time employment increased 19,700 to 3,515,700. Unemployment increased 20,300 to 741,700. The number of unemployed persons looking for full-time work increased 10,000 to 543,000 and the number of unemployed persons only looking for part-time work increased 10,300 to 198,600. The unemployment rate increased 0.1 pts to 6.0%. Participation rate increased 0.1 pts...
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Goldman sticks to rate cut

gs-620x349 Via the SMH blog: Goldman Sachs economist Tim Toohey has boldly stuck to his call for a further RBA rate cut as the consensus shifted overwhelmingly to on hold. In light of new consumer confidence figures, which increased only slightly, Toohey asks how much longer can the RBA afford to wait before it cuts rates? "Only last week the Governor reminded markets that the RBA "still has plenty of ammunition on interest rates" and appeared to set up the August Statement on Monetary Policy as a key point in the evolution of RBA policy. With consumer sentiment clearly in the RBA's "rate cutting...
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Bullard stokes US inflation panic

imgres From St Louise Fed chair James Bullard today via Bloomie: Federal Reserve Bank of St. Louis President James Bullard said a surprisingly fast drop in unemployment will fuel inflation, bolstering his case for an interest-rate increase early next year. “I think we are going to overshoot here on inflation,” Bullard said today in a telephone interview from St. Louis. He predicted an inflation rate of 2.4 percent at the end of 2015, “well above” the Fed’s 2 percent target. “That is a break from where most of the committee seems to be, which is a very slow convergence of inflation to...
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VEDA: Consumer credit hit hard by Budget

ScreenHunter_01 Sep. 06 07.42 By Leith van Onselen Veda has today released its Consumer Credit Demand Index results for the June quarter of 2014, which registered a 3.0% fall in total annual consumer credit demand, although growth in mortgage enquiries remained solid. Veda are the largest credit recording agency in Australia, and every application for any formal loan through any retail lender is recorded with them. As such, results published by Veda should be taken seriously. According to the media release: The downturn in the June quarter was driven by a sharp fall in personal loan applications as well as a...
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Why Australia needs Uber ridesharing

ScreenHunter_3037 Jun. 30 09.27 By Leith van Onselen The Age has published an article claiming that Sydney, Melbourne and Perth taxi fare are amongst the most expensive in the world: ...when it comes to trips from the airport to the city, ...taxis in three Australian cities [were] named among the most expensive in the world, according to new research... The survey, conducted on June 28, included cities in Australia, New Zealand, Spain, Russia, the United States and the United Kingdom... Sydney ranked third on the list with an average taxi fare of $A3.95/km, making it the most expensive Australian airport to catch a taxi...
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ANZ realtor survey shows tearaway foreign buying

fqeaq The ANZ's quarterly property industry survey is out and they're a little less happy: The Australian Property Confidence Index fell 1 point to 131 in the September Quarter. While this is down from the high of 140 in Q1 of this year, it remains higher than a year ago (121) and well above the levels recorded for much of the past three years (see Figure 1). Confidence across the residential and non-residential property sectors remains strong, is more positive than broader business confidence, and is in stark contrast to the recent weakness in consumer confidence. • NSW remains the stand out State...
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Big capital city rents rise, small tumble

ScreenHunter_07 Jul. 17 21.09 By Leith van Onselen Australian Property Monitors (APM) today released its rental market report for June, which revealed strong annual growth in Sydney and Melbourne house rents, but below inflation or negative growth elsewhere: As you can see above, rents in Perth and Canberra, in particular, have fallen sharply over the past year across both houses and apartments. The weakness in Perth is likely attributable to the unwinding of the mining boom, whereas cutbacks in the Canberra public service, along with recent strong dwelling construction, have weakened rents there. In terms of...
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Cheapest money in 500 years will end how?

Nuclear-Explosion-550x690 The Pascometer has a good piece today on the global dash for trash: It’s one thing for the central bankers’ central bank to warn of cheap money distorting the world’s markets, but it’s another for more comprehensible anecdotes to start adding up to the trillions. In short order: Last year a record US$477 billion worth of high-yield bonds were sold, but US$340 billion worth have been offloaded in just the first half of 2014. Dutch interest rates have never been lower, not in 500 years. Fuelled by cheap money, there are more American mergers and acquisitions underway than there...
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Busting CIS’s 8 housing affordability myths (members)

ScreenHunter_3212 Jul. 10 07.03 By Leith van Onselen Stephen Kirchner from the Centre for Independent Studies (CIS) has released a new report examining the "Eight Myths of Housing Affordability" in a bid to "improve the quality of public debate about housing affordability". It's making headlines everywhere today. Let's examine each of the so-called myths one-by-one. Myth 1: Lower interest rates make housing more affordable  Global real interest rates have declined over the last 30 years. As Australian borrowing rates are largely determined overseas, real mortgage interest rates in Australia have also declined. From...
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Germany versus Argentina World Cup final

wefrqe So, whadya reckon? Who will...
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Daily iron ore price update (BDI dump)

sdf Here are the iron ore price charts for July 9, 2014: Another day of dancing on the pin head. The big mover was the BDI cape which fell 6% to its lowest point since early June and broke its up trend. Texture from Reuters: Fewer spot iron ore cargoes were traded after a flurry of deals on Tuesday, traders said. "In my opinion right now it's 50-50, there's not too much downside, there's not too much upside for the market," said a trader in Shanghai who has held off from buying iron ore until stronger signs emerge on where prices are headed. There is particularly an oversupply of lower...
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China attacks banks for Oz money laundering

images The first large crack just appeared the great Australian dream of laundering Chinese money through our property market. From the SCMP: State broadcaster CCTV yesterday accused the Bank of China of offering a money laundering service to wealthy mainlanders and helping them to siphon cash out of the country. The accusations against one of the country's five biggest state-owned commercial banks led to speculation that the leadership may be preparing to shake up the financial and banking sectors. ...Under Chinese law, citizens are allowed take only the equivalent of US$50,000 out of the country each...
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Climate, nation forgotten in policy scab grab

hb Careful what you wish for. From the AFR: A key business organisation, the Australian Industry Group (AIG), said the entire business community was frustrated at the prospect of yet another ­policy vacuum on climate change, saying it would only increase business uncertainty, create a perception of risk, and affect investment decisions. “Everyone in the business community just wants the issue to go away and be resolved,’’ said Ai Group chief executive Innes Willox, who supports a scheme trading in cheap overseas carbon permits. “We’ve gone through seven years of this now and, still,...
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