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Markets turn on RBA dollar call

The Aussie got as high as $74.23 last night on the RBA rally: Courtesy of Forexlive comes a wrap of sell side thoughts: BofA Merrill: This is the first statement since Mar 2014 when Stevens hasn’t explicitly mentioned the currency was too high – that’s a BIG deal. With positioning short AUDUSD, decent data earlier today and


“National team” saves Shanghai again

From the FT: The Shanghai Composite Index gained 3.7 per cent, its best day since July 10, after dropping 10 per cent last week and another 1.1 per cent on Monday. A coalition of state-owned financial institutions — known collectively as the “national team” — have backstopped share prices in recent weeks after the Shanghai


China’s growing steel recession

Cross-posted from Investing in Chinese Stocks. I started talking about the potential for a recession in the northeast of China in October of last year and the data shows a full blown recession is underway, even without adjusting for overstated national GDP figures. The bottom six provinces on this list are Inner Mongolia, Hebei, Jilin,


Links 5 August 2015

Global Macro / Markets / Investing: The Oil Crash Has Caused a $1.3 Trillion Wipeout – Bloomberg Oil’s Drop Below $50 May Be Just the Start as Demand Swoons – Bloomberg A Comparison of U.S. and International Global Systemically Important Banks – Emerging markets: Redrawing the world map – Financial Times Waiting For Normal


ASX at the close

Chris Weston, Chief Market Strategist at IG Markets It’s generally been an upbeat session here in Asia despite continuation deterioration in oil and inflation expectations. It seems the bulls have had a better say in Australia and China and certainly I think price action in Australia looks quite interesting. I would say even the bulls


Bill Evans shocked by RBA

From Bill Evans: As expected the Reserve Bank Board decided to leave the cash rate unchanged at 2.0%. However, we were very surprised that in the Governor’s statement on the Australian dollar he did not repeat the sentence “Further depreciation seems both likely and necessary” . Since he introduced that language in May, the AUD


RBA holds, dumps easing bias

The Reserve Bank has announced another hold for its August meeting: 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, but some key commodity prices are much lower than a year ago. Much of this trend appears to


Time to pull Australian dollar shorts?

From the AFR comes RBS’s head of macro strategy in Asia, Greg Gibbs: …”Even though iron ore prices have been relatively stable since the last RBA meeting… the broader theme around commodities is quite soft,” said Mr Gibbs. “There’s a general bearishness around commodity currencies.” “It does suggest that the data is not all that bad and there’s not


Australia’s June quarter trade deficit shocker

By Leith van Onselen The Australian Bureau of Statistics (ABS) today released trade data for the month of June, with Australia recording its biggest quarterly trade deficit in the post-GFC era. In the month of June, the trade deficit deteriorated to $2,933 million. The result still beat analyst’s expectations, however, who had expected a trade


MSM pump primes RIO dividend

From the AFR: When Rio reports this week, analysts’ consensus is for underlying earnings to shrink to $US2.4 billion, from $US5.1 billion in the year-earlier period. …Despite the cash flow squeeze, Deutsche mining analyst Paul Young says savings from expected cuts to capital spend, from an already reduced target of $US7bn, and continuing cost cutting “should underpin another buyback in February 2016″. Rio


China trains new gun on shorts

From Reuters: The Shanghai and Shenzhen exchanges said in separate statements on Monday night that the rules, effective immediately, would prevent traders from borrowing and repaying stocks within a day. China’s exchanges and markets watchdog are cracking down on short-selling as part of a broad government-orchestrated effort to prevent a collapse in its markets, which


Consumer confidence holds at average

By Leith van Onselen The ANZ-Roy Morgan Research consumer confidence index continued to recover in the week ended 2 August, rising 0.4 points to 112.9 to be tracking around the long-run average of around 113 points (see next chart). Three of the survey’s five components improved over the week, with family finances up 3.61% to


Abbott rains defence pork on South Australia

By Leith van Onselen In April last year, Treasurer Joe Hockey declared an end to industry assistance and warned that “no country has ever subsidised its way to prosperity”: The difficult decisions that will underpin our movement to a new age of responsibility must also include the corporate sector. Too many taxpayers’ dollars have been


Foreigners sour on Aussie bonds

From the WSJ, on international investor’s waning enthusiasm for Aussie government bonds: The love affair is now cooling as investors sense the end of the global low-rate era. The U.S. Federal Reserve, in particular, is widely expected to raise rates from near zero as soon as September, a move likely to ripple through global bond