Macro Afternoon

Asian stocks generally rose across the region with most activity in currency markets as the Chinese coal closure and the latest domestic unemployment print pushed the Australian dollar all over the place. The Shanghai Composite fell in the latter half of the session, falling 0.3% to close at 2751 points as its bear market rally pauses.

Latest posts


Julie Bishop deals death blow to Scummo

Chaos! Farewell Julie: Today I announced that I will not re-contest the seat of #Curtin at the next election. It’s been an honour to serve as the member for Curtin, Foreign Minister of Australia & Deputy Leader of @LiberalAus pic.twitter.com/Vqai7ht03K — Julie Bishop (@JulieBishopMP) February 21, 2019


Australian dollar hammered as China bans Aussie coal

Well, don’t say we didn’t warn you. Via Reuters: Customs at China’s northern Dalian port has banned imports of Australian coal and will cap overall coal imports for 2019 through its harbours at 12 million tonnes, an official at Dalian Port Group told Reuters on Thursday. The indefinite ban on imports from top supplier Australia,


NZ mulls land bankers’ tax

By Leith van Onselen New Zealand’s Tax Working Group (TWG) – an 11-member group chaired by former Labour Finance Minister Michael Cullen – has delivered its final report, which recommends creating a local government tax on vacant residential land in a bid to stop land banking. From Interest.co.nz: The Tax Working Group (TWG) is recommending a new tax on vacant


ATO tax avoidance measures net $7.7 billion

By Leith van Onselen The Australian Taxation Office’s (ATO) has collected an extra $7.7 billion in unpaid tax liabilities since July 2016 over the past two years through its tax avoidance taskforce. In particular, 44 multinationals have changed their business models in order to meet their Australian tax liabilities, whereas $4.7bn worth of unpaid tax liabilities have


ABS employment in detail: Good for jobs but bad for wages

By Leith van Onselen As summarised earlier, the Australian Bureau of Statistics (ABS) today released its labour force report for January, which registered a strong 39,100 increase in total employment and but no change in the headline unemployment (still 5.0%) because of a small rise in labour force participation. In trend terms, the unemployment rate


Are Brisbane high-rise values about to enter growth phase?

By Leith van Onselen CoreLogic’s most recent Pain & Gain report showed that 29% of Brisbane apartment owners sold for a loss in the September quarter of 2018: CoreLogic’s hedonic index also shows that Brisbane unit values have declined by 11% since peaking in March 2008 (obviously much further in real terms): Now, Place Advisory has


Westpac hit with class action over ‘irresponsible’ mortgages

By Leith van Onselen Westpac will face a class action in the federal court for issuing home loans that breached responsible lending rules. From SBS News: Westpac is facing a class action for allegedly giving loans to people who couldn’t afford to pay them back. The class action, in the Federal Court, is the first


Australian jobs boom gets even stronger

The ABS is out with January Labour Force and the news is amusing: SEASONALLY ADJUSTED ESTIMATES Employed persons increased 39,100 to 12,751,800. Full-time employed persons increased 65,400 to 8,743,100 and part-time employed persons decreased 26,300 to 4,008,700. Unemployed persons increased 6,600 to 673,500. Unemployment rate remained steady at 5.0%. Participation rate increased 0.1 pts to


Final auction clearance rate continues seasonal bounce

By Leith van Onselen Last weekend, CoreLogic released its preliminary auction clearance rates, which revealed the following results: Today, CoreLogic has released its final auction results, which reported a 3.0% decline in the final national auction clearance rate to 51.2% – basically the same as last week (51.1%): As you can see, Sydney’s auction clearance rate


Australian flash PMI plunges into recession

Recession anyone? Via CBA: Business activity in the Australian private sector decreased fractionally in February as a dip in services activity outweighed continued growth in manufacturing. New orders also ticked down, but employment continued to rise solidly. On the price front, both input costs and output prices increased at sharper rates than in January. Companies,


Business leaders warn of crumbling consumer

By Leith van Onselen Australia’s business leaders have finally admitted they are concerned about Australia’s crashing property market and falling consumer demand. From The Canberra Times: Woolworths chief executive Brad Banducci… said cautious consumers at the shopping giant’s stores were buying less each time they shopped… Mark Steinert, chief executive at housing and retail property


NSW belatedly cracks down on towers inferno

By Leith van Onselen The independent report on the Opal Tower farce, which saw residents evacuated from the 34-storey structure after huge cracks were discovered, has forced the NSW Government to crackdown on shoddy high-rise construction. From The Daily Telegraph: The state government is expected to hand down its final report into the 36-storey Sydney


Glencore breaks from coal

Via the AFR: It says everything about the intellectual savvy and raw power of the global anti-coal lobby that it has corralled Ivan Glasenberg into a profound public concession on coal mining. His ear-battered competitors say the softest thing about Glasenberg is the enamel of his teeth. Glencore’s chief executive and senior shareholder is hard.


McGrathmageddon: “Exceptional” property market “resurgent”

This is how one McGrathmageddon realtor summed up the property market this week: 2019 looks more promising than many would have thought. November and December were very tough but in January things really picked up. Buyer enquiry has been exceptional. The negative media reports preaching that it’s a great time to purchase must be prompting buyer


Corruption swamps Scummo Government

Tony Wright sums of the death of our Westminster system of government today: With fast-gathering regularity, ministerial responsibility appears to have all but decayed to no responsibility. Daily now the nation is assaulted by revelations of conduct that would get the cold shoulder in a shearer’s pub. It is as if Prime Minister Scott Morrison’s


Why Aussie wages are the weakest in the world

Throughout this cycle, MB has gotten wages right. While everyone else forecast wages booms we predicted they would remain in the gutter. This was one key rationale behind our equally contrarian call that the RBA’s next move was always going to be down. How did we know this when everyone else said otherwise? See Bloomie: The


Look on the brightside: falling inflation lifting real wages

By Leith van Onselen Yesterday’s wages price index released by the ABS revealed a softening of annual wages growth to 2.27%: However, when adjusted for underlying inflation, which has softened, real wages firmed to 0.45% growth in the year to December: However, there remains a big disconnect between the private and public sectors. The private


Kouk: Budget surplus falling apart

Via the Kouk today: Word has it that the framing of the budget, due to be handed down by Treasurer Josh Frydenberg the day after April fools day (and around 6 weeks before the election), is more problematic than usual. Problematic because there is some mixed news on the economy that will threaten the current


Peak Chinese visitors?

By Leith van Onselen The Australian Bureau of Statistics yesterday released its overseas short-term arrivals and departures figures for December, which continued to show a trend rise in the number of inbound visitors, with both Chinese arrivals and student arrivals hitting an all-time high. The number of short-term visitor arrivals surged by a seasonal 32%


Links 21 February 2019

Global Macro / Markets / Investing: A Centuries-Old Idea Could Revolutionize Climate Policy – The Atlantic What’s Really in Your Index Fund? – NY Times This Hedge Fund Reaps Huge Returns But It Doesn’t Want Your Money – Bloomberg The 2018 Global Corporate Venture Capital Report – CB Insights Investors Sound Warning About Markets’ Complacency