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Federal budget: Increasing home ownership on the Coalition’s terms

CoreLogic’s head of research, Eliza Owen, has released a note explaining the federal budget’s housing policy changes: Housing affordability is becoming an increasing concern for first home buyers and policy makers amid recent, rapid price increases. But the double-edged sword of reducing housing values to make them more affordable, is that housing also makes up

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Academics: Frydenberg turns Australia into “guest worker state”

Stephen Clibborn and Chris F. Wright from the University of Sydney have attacked Josh Frydenberg’s decision to uncap international students’ work hours across hospitality and tourism, claiming that it will create a “guest worker state” that will push wages and working conditions lower: Our research shows it [the decision] is consistent with a troubling 25-year

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China to shift more LNG imports from Australia

More good news today on the Australia/China divorce from the anti-Australian nutters at SCMP: China aims to cut more Australian LNG imports. Turkmenistan is already China’s largest gas supplier. That will expand. There will also more trade, investment and connectivity. That’s more like it. Turkmenistan is a semi-communist dictatorship so fits right in with the

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Bloated superannuation sector to expand following Budget

Australia’s bloated superannuation sector was a major beneficiary of last night’s federal budget. Not only did the budget keep the scheduled rise in the superannuation guarantee (SG) to 12% in place, but it also: removed the current $450 per month minimum income threshold for the superannuation guarantee; removed the work test for older Australians to

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Gotti panics over impending “wages explosion”

According to Robert Gottliebsen, the collapse in immigration is about to send wages into the stratosphere and force employers to invest in labour saving technology. Therefore, Australia quickly needs to reboot immigration to ward off wage rises: Australia should prepare for much higher wage and salary pressures… I was talking to professional services firms including

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April Australian property market update

Australian property market prices continued to climb over the last month, and mortgage interest rates stayed constant. There are some extraordinary divergences in affordability. It has never been cheaper in most markets to service a mortgage, but never more expensive to save for a deposit or pay off the loan. In general, housing valuation and

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Treasury has no idea on wages

It is clear from last night’s federal budget that the Australian Treasury has no idea on wages. For years we watched the Treasury make bullish predictions on wage growth, always forecasting a marked pick-up in wages over the forward estimates period: This bullishness came despite the federal government running one of the biggest immigration programs

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Rental vacancies tightest in 8 years

SQM Research has released its rental vacancy data for April, which reports a national rental vacancy rate of only 1.9% – the lowest level of vacancies since March 2013. Rental vacancies are zipped tight everywhere except Melbourne and Sydney, which have been hit hardest by the loss of international students, as illustrated clearly in the

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What kind of inflation is coming?

BofA with the note. I agree with the conclusions: Four futures for inflation A different asset allocation is warranted depending on what you believe about inflation and its effects. 1. Transitory and good: on this view, the good news about“bad” prices is that those prices are a sign of a faster-than-expected economic rebound. Temporary frictions

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The old temporary revenue meets permanent spending trick!

There is nothing that a pollie likes more than temporary revenue recycled as permanent spending. Capital Economics with the note: Treasurer Josh Frydenberg revealed in today’s Budget that the government will spend nearly all of the windfall accruing from the stronger economic recovery. That will result in a permanently larger role of the state and a

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Judith Sloan demolishes ‘Big Australia’ carpetbaggers

The Australian’s Judith Sloan, a former commissioner at the Productivity Commission, has demolished the vested interests pushing for a quick return to mass immigration. In summary: Supporters of a ‘Big Australia’ include the property sector, universities and other educational institutions, and federal Treasury. These organisations never consider the downsides of high immigration levels, including lower

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Post JobKeeper jobs softness appears

Westpac with the note: Headline Weekly Payroll jobs estimates rose 0.4% between April 24 and April 10. Total wages paid by employers rose by 0.3%. For the second fortnight in a row, seasonal factors associated with shifting school holidays have made it difficult to obtain a clear read on the impact of the ending of

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Daily iron ore price update (China census demographic doom)

The ferrous complex calmed down a little yesterday after Chinese regulatory intervention but oftentimes it takes more than one hammer to hit the iron ore nail so expect further moves. Spot eased. Paper firmed overnight. Steel waltzed straight through: In data new, Brazilian April exports were soft as expected, up only 7.5% over the year.

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Macro Morning

While the NASDAQ was unchanged overnight, the risk of the risk complex continued to oscillate into negative territory on inflation concerns with Treasury yields spiking yet again. European stocks joined in on the selloff alongside the broader issues on Wall Street, while the USD was largely unchanged as commodity prices continued their advance. This along

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UBS: Budget to bring rate hikes

Via the excellent George Tharenou: Budget: only $8bn budget improvement over 5 years; given $96bn stimulus The Australian Government Budget, relative to the MYEFO released in Dec-20, forecasts a far smaller than expected cumulative improvement over the 5 years to 24/25 of only $8bn. Positively, 20/21 is a material $37bn better at $161bn (UBSe: $148bn,

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Australian dollar strong as stocks dump

DXY was stable last night: The Australian dollar was also stable: Gold firmed, oil fell: Base metals lifted again: But miners mostly fell: EM stocks were whacked: Junk eased: US yields are rebounding: Which didn’t help stocks: Westpac has the wrap: Event Wrap The Australian Federal Budget surprised with a spending package which is larger than was

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ABC: Low immigration will drive up wages

Former Queensland ALP senator, John Black, gave an insightful interview on ABC Drive, where he explained why the collapse in immigration will lead to higher wage growth for Australian workers – something the Reserve Bank claims is vital to fueling the economic recovery: Interviewer: “Is it correct that Australia’s economic growth has majorly come from

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Federal Budget 2021: Spending in most of the right areas

Tonight’s Federal Budget delivered by Treasurer Josh Frydenberg contained few surprises. As expected, there are forecast Budget deficits as far as they eye can see; albeit not as high as the October Budget predicted owing to the stronger than expected economic recovery and the iron ore mega-boom: The budget projects that the nation’s unemployment rate

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Links 12 May 2021

Global Macro / Markets / Investing: Rich countries drained $152tn from the global South since 1960 – Aljazeera Impacted Supply Chains Causing Shortages Across Multiple Sectors – CNN Prices are rising everywhere you look – CNN Why Stocks Soared While America Struggled – VOX Research and innovation policies and productivity growth – Bruegel Iron Ore

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Macro Afternoon

Not a pretty sight across stock markets here in Asia in response to the tech wreck on Wall Street overnight, the exception being mainland Chinese bourses and relatively speaking, the local ASX200.  The USD is also losing ground across the major currencies after last night’s reversal with gold still holding on well above the $1830USD

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Dud US jobs Numberwang?

Standard Chartered with the note. Recall that they were just about the most bullish in the market prior to the release: Work disincentives likely a future issue, but not in April There is a lot of discussion on the big forecast miss of April non-farm payrolls (NFP). The consensus was for around 1mn jobs, our forecast

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Male workers lag jobs rebound

The Australian Bureau of Statistics (ABS) today released Weekly Payroll Jobs and Wages data for the week ended 24 April 2021, which showed that payroll jobs are now running 1.9% above their pre-COVID level, whereas total wages are up 2.8%: Payroll jobs and wages are now running higher than pre-COVID levels across every jurisdiction: Women