And now for a terms of trade shock. Just what an income denuded, surplus-obsessed, stall speed economy does not need. Yesterday’s trade balance numbers finally registered the inevitable as it fell from a surplus of $6.8bn to $4.5bn on the back of clubbed bulk commodoty prices: This is just the beginning. My base case for
The truth is laid bare for all to see. Australia faces five critical challenges to its social and economic wellbeing today and, alas, it now abundently clear that the nation elected the wrong government to deal with any and all of them. The first and largest challenge is climate change. Science, drought and bushfires are
From Ironyhaven today: Coal > climate change > drought > no coal.
Welcome to the new frontier of LNG doom. Via FTAlphaville: This is a guest post by Rauli Partanen, an author, analyst and communicator on climate change, environment and energy systems. Partanen co-founded and leads Think Atom, a non-profit think tank advocating nuclear energy alternatives. In this post he argues Germany’s interests in natural gas are jeopardising the European Taxonomy for
Bravo RBNZ again: The Reserve Bank of New Zealand today released its final decisions following its comprehensive review of its capital framework for banks, known as the Capital Review. Governor Adrian Orr said the decisions to increase capital requirements are about making the banking system safer for all New Zealanders, and will ensure bank owners have
Let’s start the parade of bad ideas with Gottiboff: Our largest state, NSW is the country’s engine room, but it has a crazy property development approval system designed to create uncertainty and boost costs. Victoria has a deep energy crisis that makes both consumers and business nervous. Victoria creates an artificial gas shortage by banning
In his recent speech describing unconventional policy options, Governor Phil Lowe noted that: The fourth policy response was forward guidance. This took two forms: calendar based and state based. Under calendar-based guidance, the central bank makes an explicit commitment not to increase interest rates until a certain point in time. Under state-based guidance, the central
Trying to get blood from a stone, at Domain: Embattled Liberal MP Gladys Liu has requested her party pay back at least $100,000 she donated to her campaign to win the marginal Melbourne seat of Chisholm. Ms Liu contributed the money to her own election campaign in the lead-up to the May 18 poll after
Via the AFR: The Federal Court has set a date for the appeal against the “Wagyu and shiraz” judgment, however the regulator will be meeting a different adversary than the one it faced off against in the first half of 2019. The Australian Securities and Investments Commission will front up to a full bench of Federal
Via Banking Day: Citibank is facing a backlash from politicians and consumer groups this morning after moving to claw back recent home loan rate cuts from new borrowers. In a controversial move that undermines the Reserve Bank’s efforts to relieve pressure on household budgets and boost spending in the economy, Citi yesterday became the first
Iron ore price charts for December 4, 2019: Spot up. Paper down as the contact rolled forward. Steel down. No change. Firm pricing through to Q2, 2020. A little enhanced now by Vale’s problems.
Congratulations. L-plate Treasurer Josh Recessionberg has done it: “The government’s goal has always been to be that to put more money in the pockets of the Australian people and it is their choice as to whether they spend or save it. “If people pay down their debt, then ultimately in the long run, they will
DXY was down last night as CNY jumped: The Australian dollar roared back against DMs: But EMs did better: Gold sagged: Oil lifted: Metals too: And miners: Plus EM stocks: And junk: All bonds sold: As stocks rebounded: Another day, another trade rumour, at Bloomie: The U.S. and China are moving closer to agreeing on
Via Caixin: The Caixin China Composite PMI™ data (which covers both manufacturing and services) signalled a solid increase in total business activity across China in November. The Composite Output Index rose from 52.0 in October to 53.2, to indicate the steepest rate of growth for 21 months. The upturn was driven by strong performances across
From the always excellent Adrian Blundell-Wignall today at the AFR: In the early phases of economic development, authoritarian governments can more or less “buy” economic growth. Asia did it in the run-up to the 1998 crisis…In effect, “costs” — such as providing capital to new workers moving from the countryside to the cities — are
Via the excellent George Theranou comes the fruition of Recessionberg: Q3 GDP slowed to 0.4% q/q after 0.6%; but edged up to 1.7% y/y after 1.6% Q3 real GDP unexpectedly slowed to just 0.4% q/q (UBS 0.5%; mkt 0.5%), albeit after an upwardly revised 0.6% in Q2 (was 0.5%). Hence, the y/y ticked up to
Via Martin North: We continue to release the data from our household surveys to end November 2019. Today we look at our Household Financial Confidence Index, which examines how households are feeling about their financial status, relative to a year ago. The index dropped again to 83.5, which is a new low in the series,
Not much fun for Aussie assets today. The Australian dollar has come off a little from its Lunatic RBA spike: Bonds too: XJO is getting creamed, down another 1.7% after 2% yesterday: And sporting a potential major double top pattern: Dalian has a mind of its own as Vale worries: Big Iron ore is thumped
According to Bloomberg, here’s how some fund managers are preparing for Aussie QE: …Australian sovereign bond yields are likely to fall across the curve as the RBA steps in as a default purchaser, said Raymond Lee, money manager at Kapstream Capital, a unit of Janus Henderson Investors. That makes government bonds a fairly compelling buy
Via ASPI comes Amy King is a senior lecturer at the Strategic and Defence Studies Centre at the Australian National University: For more than a century, close economic ties between China and Japan have developed in the absence of cooperative political and security relations, suggesting that the first is not a necessary precondition for the
Hoocoodanode? September key figures Seasonally adjusted, percentage change (a) Jun 18 to Sep 18 Sep 18 to Dec 18 Dec 18 to Mar 19 Mar 19 to Jun 19 Jun 19 to Sep 19 Sep 18 to Sep 19 Chain volume GDP and related measures (b) GDP 0.3 0.2 0.5 0.6 0.4 1.7 GDP per
Some more good news for the species, not, from the World Meteorological Organisation: The year 2019 concludes a decade of exceptional global heat, retreating ice and record sea levels driven by greenhouse gases from human activities. Average temperatures for the five-year (2015-2019) and ten-year (2010-2019) periods are almost certain to be the highest on record.
The ABS released September QTR balance of payments yesterday and it threw up the largest quarterly current account surplus on record in both dollar and percentage of GDP terms: Even the annual figure turned positive: Though is less impressive (so far) in annual terms: It will likely also set recrods in the December quarter though
Those looking for imminent macroprudential will be disappointed I fear. From the Council of Financial Regulators: Financing conditions and the housing market. Council members discussed trends in credit and recent developments in the housing market. Growth in housing credit remains subdued overall, with credit to investors particularly weak. Owner-occupier loan commitments and housing turnover in
So says Domain, in news that will shock nobody: Liberal MP Gladys Liu secured access to the federal government for a company and Liberal Party donor endorsed by the Chinese Communist Party and later implicated in a major organised crime probe into $1 million in suspected drug money. Brighsun New Energy is the Australian subsidiary
Texture from Reuters: “As (China’s) winter production control is less severe than last year and steel demand remains solid due to government’s support policies, we expect the steel prices to rise further, underpinning further recovery in iron ore and coking coal prices,” said Helen Lau, metals and mining analyst at Argonaut Securities. Meh. This is
Via the AIG: Apparently retail is booming. Or not, according to the CBA version: Full report.
DXY was soft last night as EUR rose and CNY fell: The Australian dollar was strong: So was gold: Oil was muted: If metals are the bellwhether then bunker: Miners fell: EM stocks fell: Junk was OK: Treasuries jumped: And bunds: Aussie bonds reversed the RBA damage: Stocks fell sharply: It was an evening of
Via Martin North: DFA has released our mortgage stress survey results to the end of November. And after a couple of months going sideways, thanks to some rate cuts and tax refunds, the trajectory has gone sharply higher again this month. One factor which is now biting is the switch from interest only loan to
Via Bill Evans at Westpac: As expected, the Reserve Bank Board decided to leave the cash rate unchanged at 0.75%. The key themes around the policy outlook which have been consistently promoted in these RBA statements in recent months have been repeated today. Firstly, the Board “continues to monitor developments, including in the labour market”,
