Australian dollar pumps and dumps on mortgage crash

The Aussie dollar did a round trip this morning as it misinterpreted today’s data dump. The NAB business survey rebounded modestly which took the AUD higher but ABS mortgages absolutely plunged and, frankly, are suggesting firmly that Australia is in the grip of house price crash:

Business conditions are obviously a trailing indicator versus that little shocker so eventually the AUD followed mortgages down to new lows:

To be honest, the RBA ought to be panicking about this data. If it does not cut very soon then it is going to have a truly historic accident on it hands (and maybe it will regardless).

Bonds are also confused:

As is XJO which thinks all is well:

Big Iron is ripping on:

Though Dalian has stopped:

Big Gas is fading:

Big Gold still wants to break out thanks to the AUD:

Big Banks have a nice head shoulders bottom pattern but I am not a believer:

And Big Realty looks very troubled:

Is it any wonder as mortgages crash?

Comments

  1. CBA may be the key to this market.

    Current share price is same as it was 12 months ago so its failed to price in:

    -the entire Royal Commission proceedings
    -two profit warnings, an underlying earnings fall (and a miss at that)
    -defaults across its portfolio trending higher
    -spiking BBSW, rising funding costs and falling NIMS
    – a further 8% decline in house prices
    -15% y-on-y fall in lending to households

    A bit hard to understand, even the usual perma-bullish sell-side analysts have much lower targets for it, and all the other banks have suffered falls.

      • I suspect its algorithmic manipulation at work. One difference with the other banks is higher share price. That means the depth is much thinner, there’s usually only a couple of hundred on the bid/ask which is much easier to mess with. Also its the leader of the finance sector, so can easily drag the entire index with it

    • It’s baffling.

      Early November is when CBA decoupled from WBC and NAB. The only major news items that I can find around that period:

      – Westpac case against ASIC strung out; NAB and WBC fell, CBA also fell (but not as much)
      – APRA increasing capital requirements; NAB fell (refer below), but CBA and WBC rallied
      – NAB went ex-dividend

      Either way, I can’t see any rationale for why Australia’s largest mortgage lender should be resilient to the forces buffeting WBC and NAB.

      It seems that Mr Market has faded the RC’s ‘fallout’ and is yet to price in any of this?

      -two profit warnings, an underlying earnings fall (and a miss at that)
      -defaults across its portfolio trending higher
      -spiking BBSW, rising funding costs and falling NIMS
      – a further 8% decline in house prices
      -15% y-on-y fall in lending to households

      • @ Brenton

        Bank of choice for immigrants is CBA.

        With Labor tipped to win the election this signals more immigrants and thus more customers/home loans for CBA….sarc !!

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