ASX at the close

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets The Chinese PMIs seemed to have eased fears that the economy would collapse while the US non-farm payrolls (NFP) numbers have pushed back the likely date of a rate rise by the Fed into 2016. This has seen a weakening in the US dollar,

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Dumb bubble: Buy crashing property for yield

From Domainfax: There’s a upside in property markets like Perth where house prices are falling: strong rental yields. The town of Northam, 100 kilometres, east of Perth has made the top 10 best yield suburbs in property research group Residex’s Best Rents Report in September. “WA might be suffering a downturn, but it depends on where you look,”


Turnbull talks tax reform

By Leith van Onselen Prime Minister Malcolm Turnbull has given an interesting interview today to Neil Mitchell on 3AW radio, where he has spelled-out his framework for tax reform: Malcolm Turnbull: We have to look at the tax system. The tax system is the single biggest thing that the Federal Government does that incentivises and


No surprises from RBA

Here ’tis” Statement by Glenn Stevens, Governor: Monetary Policy Decision At its meeting today, the Board decided to leave the cash rate unchanged at 2.0 per cent. The global economy is expanding at a moderate pace, with some further softening in conditions in China and east Asia of late, but stronger US growth. Key commodity


Which miners to short then?

The hysterical rally in global resource stocks in nicely illustrating the sense in the MB strategy for dealing with this bear market. The rallies are so explosive and short that it is virtually impossible to position for them. On the other hand the trend lower in resource stocks is reliable and intact and one that can be invested


Australian immigration at GFC low

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released visitor arrivals and departures data for the month of August, which registered further falls in net long-term and permanent migration into Australia. In the year to August 2015, there were 679,990 permanent and long-term arrivals into Australia – down from the record 792,500


Trade deficit widens in August

By Leith van Onselen The Australian Bureau of Statistics (ABS) today releasing trade data for the month of August, with Australia’s trade deficit deteriorating to $3,095 million from $2,792 million in July (revised up from $2,460 million). The result easily missed analyst’s expectations, who had expected the trade deficit to narrow to $2.4 billion. It


Another reason to sell miners

From Citi: Poor capital allocation has been one of the key reasons for the significant underperformance of the sector over the past few years, which was fuelled by strong cash generation in the supercycle with lower propensity to give cash back as shareholders were probably chasing growth rather than yield. Earnings indexed from 2007 returned


Still no Spring bounce for mortgages

From RP Data’s weekly leading mortgage index: Still flat-lined. Full report here. No awards for guessing why, from Banking Day: Lenders continued to introduce price differentials between their mortgage rates for owner-occupiers and for investors during September. Comparison site Mozo reported that 12 lenders made changes to their rate structures last month, increasing rates for


Housing now the key to confidence

By Martin North, cross-posted from the Digital Finance Analytics Blog: The negative household confidence sentiment continued in September according to the latest results from our household surveys, released today.   The overall score was 87.73, compared with 87.69 last month. These are levels well below 100 which is a neutral result, and still in the lowest


Should Australia sell citizenship?

By Leith van Onselen A punch-up has developed over at Fairfax over a plan proposed by Senator David Leyonhjelm to establish a fee-based immigration system, whereby immigrants would pay a certain amount, say $50,000, to receive Australian residency. The scheme is currently being examined by the Productivity Commission (PC), but has been panned by a


Consumer confidence stuck in mud

By Leith van Onselen Consumer confidence remains bogged down, with the ANZ-Roy Morgan Research consumer confidence index falling another 0.6 points to 110.0 in the week ended 4 October, to be tracking well below the long-run average of around 113 (see next chart). The weekly fall in confidence was driven by increasing concerns about the


Bitter Maurice sprays loon pond all over

From The Australian comes a loon pond spray to remember: Malcolm Turnbull’s dispatch of Tony Abbott from the prime ministership settled a score that had been festering from the moment Abbott became opposition leader. They are very different people. Unlike conservative Abbott, Turnbull appeals to the fashionable Left. He is a postmodern kind of guy,


China FTA to flood Aust with foreign workers

By Leith van Onselen Joanna Howe, a senior law lecturer at Adelaide University and Rhodes Scholar who has advised the Coalition government on its temporary 457 visa program, has issued a damning report arguing that the China-Australia Free Trade Agreement (ChAFTA) would “effectively surrender [Australia’s] autonomy over its migration laws” and invite a wave of


TPP trade deal signed. Now for the detail

By Leith van Onselen The Trans-Pacific Partnership (TPP) agreement – a multilateral trade deal between 12 Pacific Rim nations (including Australia) – was finally concluded overnight in Atlanta after five intensive days of talks, and five years of overall negotiations. Agreement was reached after Australia and the US brokered a deal on so-called “biologic” drugs,


No brainer hold at the RBA

There’ll be no move at the RBA today. Its services bubble is inflating nicely and the mining crash is not going to get any worse until next year. I really have no idea when the next cut will come. Possibly this year (if, say, iron ore or wider markets were deteriorate suddenly) but perhaps more


Falling home sales meets rising supply in Perth

By Leith van Onselen As has been well documented on this blog, Perth’s housing market is deteriorating fast as the epic commodity price and mining investment boom unravels. This weakness has been most evident by Perth house prices, which have fallen by 3.8% so far this calendar year, according to RP Data: And Perth asking


Australian bank funding costs ease

From the SMH: Credit default swap spreads have now jumped by almost 55 per cent since late July, when contracts traded hands for under 60 basis points, and almost 30 per cent from mid-September. …Australia’s banks have already raised $16 billion of equity this year to strengthen their balance sheets, but more recently APRA has signalled some concern


ANZ joins war on coal

From the AFR: ANZ Banking Group will set strict rules on lending to the coal industry to bring the bank’s business into line with the growing momentum across the corporate world of reducing carbon emissions. ANZ’s new climate change commitments include $10 billion in new lending for greenhouse gas reductions over five years and a


Links 6 October 2015

Global Macro / Markets / Investing: Has U.S. Corporate Bond Market Liquidity Deteriorated? – NY Fed Trans-Pacific Partnership Trade Deal Is Reached – NYT TPP trade deal: seven things you need to know – FT U.S. Reaches Trade Deal With 11 Pacific Nations – WSJ Barclays: Profit Margins Could Be Pointing Towards a Recession –


ASX at the close

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets Global macro forces are digesting the very poor nonfarm payrolls (NFP) numbers out on Friday. Had numbers like that come out a few weeks ago it seems likely that it would have precipitated a major selloff. The NFP numbers have severely dinted the likelihood