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Macro Morning (fear returneth)

By Chris Becker China’s manufacturing PMI slump, combined with the IMFs rising concern about emerging market growth has seen global growth forecasts and risk appetites slashed, sending risk prices down all across the board. Stocks in the US and Europe were all off 2-3% while oil suffered a huge reversal in fortune, falling nearly 10%

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Aussie dollar dips to 70 cents

by Chris Becker The Aussie dollar dipped into the low 70 cent region against the USD overnight, as part of a wider risk off move that saw commodities and stocks tumble across the board. Its a new weekly and monthly low against USD: A near three year low against Yen:   And almost back to

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Commodities crash accelerated in August

By Leith van Onselen The RBA has released its commodity price index for August, which registered a sharp 3.1% decline in SDR (currency weighted) terms – the key determinant of the terms-of-trade – and a 1.0% fall in Australian dollar terms: Preliminary estimates for August indicate that the index fell by 3.1 per cent (on

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China can’t stop currency outflow

Cross posted from Investing in Chinese Stocks Bloomberg: SocGen: Half-Hearted Capital Controls Are Coming to China Société Générale China economist Wei Yao thinks Chinese policymakers will take a measured approach to solving this conundrum—allowing the currency to depreciate in a controlled manner while placing more restrictions on the flow of capital out of the country.

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Links 2 September 2015

Global Macro/Markets A Tale of Two Theories on why global growth sucks – Project Syndicate (debt or debt?) World trade suffered biggest fall in first half of year since the GFC – The Economist Europe Democratising the Eurozone – Yanis Varoukafis (good luck explaining that to the Chermans Yanis…) Fears over China and sterling stall

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ASX at the close

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets China’s Purchasing Managers Index (PMI) data has hurt sentiment in Asia and driven further downward moves in indices across the region. Commodities have been notoriously China data-sensitive of late, and after the impressive three-day rally seen in oil markets, it is not surprising to

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Uber vs regulators: the heavyweight bout of 2015

Cross-posted from The Conversation: Ride sharing, both the legal and “illegal” type is growing rapidly around the world, with new Australian entrant RideBoom the latest to take on market leader Uber. Uber, which began in San Francisco in 2009, now operates in more than 50 countries with 300,000+ driver-partners (as they are known in “uberspeak”)

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RBA holds

by Chris Becker No surprise there, the RBA holds the official cash rate at 2%. The Aussie dollar climbed from near 71 cents to just over 71.50 before the print and not much else. Boring as bat poo. Cue boring statement: At its meeting today, the Board decided to leave the cash rate unchanged at 2.0

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Australia’s terms-of-trade falls to 9-year low

By Leith van Onselen Within today’s data dump of balance of payments data that feeds into tomorrow’s national accounts release for June was the important news that Australia’s terms-of-trade has fallen another 3.4% (seasonally adjusted) and 2.5% (trend) over the quarter to be down by 10.5% (seasonally adjusted) and 9.2% (trend) over the year (see

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How APRA has changed investors’ ability to borrow

By Redom Syed, republished with permission from Property Chat: Last week the APRA chairman delivered a telling speech about the future of the lending market in Australia. The speech was the best public indication yet of what APRA is thinking, what they have done and what they’re likely to do next. Importantly, they also provided

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CAD blows out, slashes GDP

by Chris Becker The 2nd quarter balance of payments was just released this morning and the current account balance blew out to $19 billion, almost double the prior quarter’s $10.7 billion and well above expectations. Significantly, net exports as a percentage of GDP is now an even bigger drag, at -0.6% instead of the expected

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China manufacturing PMI lowest in 3 years

by Chris Becker The hits keep coming for those wedded to a strong China forever. The official manufacturing PMI print came out this morning at 49.7, the first move into contraction in six months. Non manufacturing PMI was at 53.4, slightly off the last print. Later this afternoon we get the Caixin manufacturing and services print,

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A Coalition of whingers

by Chris Becker Following a Fairfax Media report yesterday that several cabinet members want Prime Minister Tony Abbott to dump Treasurer Joe Hockey, Immigration Minister, Peter Dutton, has come out on the offensive this morning: “I think it would be helpful if some of the commentators in the area, in this space of politics, started

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Manufacturing moves further out of recession

By Leith van Onselen Australia’s manufacturing sector strengthened further in August, with the Australian Industry Group’s Performance of Manufacturing Index (PMI) rising to 51.7 points from 50.4 points in July: The manufacturing industry expanded for a second consecutive month in August, with the Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) increasing by

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Perth apartments: fools gold for foreign buyers

By Leith van Onselen Perth Now has run an article claiming that foreigners are clamouring to buy “cheap” Perth apartments, with up to 40% of sales of new city complexes reportedly being snapped-up by Asian buyers: As Perth’s property market continues to decline, more developers are looking overseas to move stock and are now hiring

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US bond yields keeping AUD/USD rallies subdued‏

Chris Weston, Chief Market Strategist at IG Markets There is an interesting dynamic at play today, with oil continuing to find huge upside price action and inflation expectations further stabilising at a time when a number of G10 central banks meet. One of those is the Reserve Bank of Australia (RBA), who meet today, and

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RBA to hold, but only just

by Chris Becker It’s that crazy time again – predicting interest rate decisions from the RBA monthly meeting. It’s very hard to make predictions, especially about the future, but I think this one is in the bag: hold. Mainly because of ammunition required in the quarters and years ahead as we “sleepwalk into recession”. Let’s