Macro Afternoon

A mixed start to the week as Asia reacts to the surprise US government shutdown with only Chinese stocks advancing. Currency markets were relatively stable with the Aussie dollar remaining under 80 cents vs USD while oil lifted slightly. In mainland China the Shanghai Composite has continued its advance above resistance at 3400 points, now up

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Shutting down the US government means a stock shutdown too

The US government shutdown is providing great headlines about Trump’s incompetence – it’s pretty hard to beat shutting your own government down when your party controls the legislative and executive branches – and equal measure to the lack of risk surrounding the shutdown. It will be over in a few days, nothing to worry about


IEA: Oil prices to squeeze over shale boom

The IEA is on the charge about  the re-engagement of US shale oil as prices reach two year highs, which heightens the downside risk to both the market price and OPEC countries. From Bloomberg: U.S. oil output is set for “explosive” growth this year as prices rally, the International Energy Agency said on Friday. That was


ASX and Australian dollar fall together

The Aussie dollar is soft today despite a weak USD: One wonders if the accumulating soft signals about an Aussie property bust are not taking their toll on rate hike expectations. Bonds are also bid a little: XJO has broken 6000 again: Dalian is up stable: And Big Iron firm: Not Big Gas: Big Gold


Abbott: Cut immigration, win the election

Via SBS: The Turnbull Government would have a better chance of winning the next election if it reduces the flow of immigration to Australia, according to former prime minister Tony Abbott. The former Liberal leader told Radio 2GB the Coalition could reverse its recent poor performance in opinion polls by following his advice on immigration


Kohler’s cryptoconfusion deepens

From Alan Kohler today, who can’t make his mind up about cryptocurrency: Much the same bafflement applies to the rest of the great and the good choppering into Davos today, and let’s face it: it IS hard to know what to make of bitcoin, and the other cryptocurrencies. …There are initial coin offerings (ICOs) almost


Domainfax Fat Cat shock exit

Lordy, is property falling apart suddenly? via Domainfax: The chief executive of real estate classifieds group Domain, Antony Catalano, has announced his sudden resignation, just two months after the company was spun off from Fairfax Media and listed on the ASX as an independent entity. …”I understand and regret that the timing of this decision is


McGrathmaggedon disintegrates

Oh dear, via the ASX: Seems to me that the wrong folks are getting boned. But if your name is above the door then I guess it ain’t easy to get rid of you. More widely, the phrase “half year earnings have been adversely affected by underperformance in the Company owned sales division, including Project


2018 Demographia International Housing Affordability Survey

By Leith van Onselen The 14th Annual Demographia International Housing Affordability Survey has been released and, once again, it ranks Australia as having one of the most expensive housing markets out of the countries surveyed. This year’s report assesses 293 urban markets in nine countries: Australia, Canada, Hong Kong, Ireland, Japan, New Zealand, Singapore, United


Developer legend: Strayan property headed for “spectacular, huge crash”

Via The Australian: Speaking exclusively to The Weekend Australian while in Adelaide this week watching the cycling team he co-owns compete in the Tour Down Under, Michael Drapac says his company’s sole focus is now in the US, where he has made millions from buying up assets that were unwanted in the wake of the global financial


McGrathmageddon plunges into the red

Via the AFR comes Su-Lin Tan with the leaking of internal McGrathmaggedon documents: They show McGrath Limited was targeting a $3.3 million net profit after tax between July and November 30 but instead sunk to a $1.3 million loss as it suffered from falling commission income from residential house sales. …The internal documents show McGrath missed its


Pascometer redlines on 457s

Weeoo, weeoo, weeoo. The Pascometer is signaling something on 457 visas. It’s not entirely clear what: The 457 visa for temporary workers won’t be officially abolished until March 1, but the number granted has already fallen by more than a third – heralding a squeeze on foreign workers by the coalition. Australian National University researcher


Weak not strong wages are forcing women back to work

Via Westpac: December sealed a solid year for the labour market Total employment rose by 34.7k in December, well above both the market’s (+15k) and Westpac’s (–10k) expectations with a small upward revision to November (to 63.6k from 61.6k). But most notably, despite the solid gains in employment, the unemployment rate rose to 5.5% as


Bad Santa appears in some data

The CBA Business Sales Index Report:  The Commonwealth Bank Business Sales Indicator (BSI) – a measure of economy-wide spending – rose by 0.4 per cent in trend terms in December after similar increases in both October and November.  But as previously highlighted, sales at combined retail and clothing stores remain soft, down by


Links 22 January 2018

Global Macro/Investing/Economics The effect of age on willingness to take risks – VOX How Warren Buffett’s billionaire deputy became an “expert-generalist” – QZ From Energy To Transport To Healthcare, Here Are 8 Industries Being Disrupted By Elon Musk And His Companies – CBInsights Can We Be Brutally Honest About Investment Returns? – WSJ 5 ways GDP gets it totally


MB Fund December Portfolio Performance

Good news: Stock selection continues to support performance with our international portfolio outperforming a falling world market. Bad news: Statistically, December was the worst month so far for our Tactical Portfolios. Perspective: A 3-day fall in global shares (priced in AUD) between Christmas and New Year was the only reason for the negative performance, and


MacroBusiness Weekend links 20-21 January, 2018

Loading the Jinker, W Lister Lister, 1914 Art Gallery of NSW   Asia China pads GDP with spending boost before party congress – Nikkei Asian Review China’s economy grew 6.9 per cent in 2017, eclipsing official targets but doubts remain – ABC China asked Marriott to shut down its website. The company complied. – Washington


Macro Afternoon

A mixed end to the trading week here in Asia with again most of the action in bond markets as the Aussie 10 year yield up another 5 points as US Treasuries head to a yearly high. Most stock markets finished flat outside of China, while commodities dropped, particularly oil markers as the Aussie dollar


When will iron ore crash next?

When will iron ore crash next? Via Deutsche: Try April-June! There are good reasons for it. March marks the peak of the post Winter restocking and running into June we see steel mills selling inventory to raise year-end cash for taxes just as miners glut the market to reach year-end volume targets.


Aussie dollar maintains rage above 80 cents

The currency we love to hate is holding on here above the psychologically important 80 cent mark against USD, just shy of last week’s false breakout high: That’s not far at all now to matching the September 2017 high and if broken, a new three year high. This trend is almost straight line perfect: Meanwhile, something


Gottiboff: Global rate hikes to trash Australian households

From Gottiboff today: Despite a few interruptions, US bond interest rates have been falling since the early 1980s as US bond prices rose, forcing yields lower. That bond boom is over. American interest rates in 2018 are now set to rise sending shockwaves around the world. Here in Australia the US directional change will edge


Sad and sorry ASX sinks back to 6000

It’s a sad and sorry ASX today sinking back to 6000: Dalian has opened down: Big Iron is soft: Big Gas is falling: Big Gold too: Bond yields are still near breakout: Leaving Big Ponzifier nowhere to hide: But Big Realty is up: Aussie dollar right on 80 cents depressing it all.