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.