Pincer update

Some good news and bad news today on Australia’s paired macro vulnerabilities. The good news first. On the houses side of the economy, bank CDS prices have fallen a little:

I’m as certain as anything in this world that this is only a breather before we go higher.

Meanwhile, on the holes side of the economy, we find the bad news. Iron ore fell more sharply yesterday, down 1.1% to $133.60:

As you can see on the chart, Shanghai rebar also fell a half a per cent or so to a new low. In better news, iron ore futures closed slightly up for the second day and are holding above the important $120 psychological level for now.

Share

About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.