No shit, Sherlock: Housing Risks Re-Emerge Wilting house prices have prompted 50% of Australian fixed-income investors to nominate a domestic housing market downturn as the top risk to Australian credit markets over the next 12 months. While regulations and tighter lending standards have played their part, external threats posed by trade wars also loom and
AUD is down modestly today as Saudi and German tensions weigh: Bonds are bid: As the ASX is pounded lower despite the big jump on Wall St and relatively calm futures: Dalian is flat: Big Iron is down: Big Gas is up: Big Gold is mixed: But the action is in banks and it is
Via Westpac: Though credit spreads in the US are off their lows, they have remained relatively impervious to the heightening global risks surrounding trade and geopolitics. This partly reflects the strength in the US economy which has continued to support corporate earnings. With credit spreads in the US and Australia tightly linked, our spreads have
Does anyone recall that glorious period for Andrew Bolt when he pounded away at the “myths” of global warming armed with one chart, the infamous “pause”: Mr Bolt remains a denier today but his chart has disappeared. Why? Because ye auld pause was just that, a pause, with temperatures since rocketing higher and confirming the
Via Martin North comes the end of the great Australian specufestor. Good riddance.
You wouldn’t know it from reading the MSM but Australia is in the middle of its second largest coal boom in history: The causes are many: China rationalisation and stimulus, supply side accidents etc. Both will ease from here most likely but not crash. And that means this, via the AFR: The federal government could
And a million snowflakes cried out in the darkness, via Politico: CNN before love-making is not his idea of a turn-on. But she can hardly turn it off—engrossed as she is in the latest unnerving gyrations of Washington. Who else to blame but Donald Trump? A president who excites hot feelings in many quarters has
Iron ore prices for October 12, 2018: Spot was up. Paper and steel firm. Rebar inventories are absolutely fine, still up one million tonnes on last year: As production remains mad, via CISA for late September output at 1.98mt: Friday’s trade data was also very much in control with steel exports leveling out around 6mt.
Via Bloomie, this is not what the market needed: Saudi Arabia threatened on Sunday to use its economic clout to retaliate against any punitive measures, hitting back after U.S. President Donald Trump said he could take action against the world’s largest oil-exporter over the disappearance of a government critic. “The kingdom emphasizes that it will
Let’s start with the good news at The Australian, a small bounce in TPP for the Government to slightly less than total destruction at 47-53: Now for the bad news at Domainfax which sees it only getting worse at 45-55: The difference may arise from how the two polls allocate preferences. Newspoll is based on
The AFR ran some more interesting stuff over weekend, this time from former Credit Suisse analyst Mark Samter: “I think Bill Shorten should be held to account for his comments and to explain to the gas market, and to gas buyers because he has left it, I would argue deliberately opaque so that unions and
DXY firmed, EUR and CNY fell Friday night: AUD was down a little: Market positioning is extremely short at -73.3k contracts. It has only been more stretched two weeks in history: With the market so short, it is difficult for the AUD to fall and easy for it to be squeezed higher on any good
El Trumpo is as bold as ever, on Fox: “It’s had a big impact,” Trump said in a Fox News interview. “Their economy has gone down very substantially and I have a lot more to do if I want to do it. “I don’t want to do it, but they have to come to the
This time hard data too, via Reuters: China’s car sales fell the most in nearly seven years in September, stoking concerns the world’s biggest auto market could contract for the first time in decades this year amid cooling economic growth and a biting trade war. Vehicle sales slumped by 11.6 percent to 2.39 million units
Via Capital Economics: • Exports continued to defy US tariffs last month but imports softened in the face of cooling domestic demand. We expect both to weaken in the coming quarters as economic growth slows in China and among its major trading partners. • Export growth accelerated in September, from 9.8% y/y to 14.5% in
Via Chris Joye today: Supposedly smart investors argue there is a long-term negative correlation between fixed-rate bonds and equities that means you should allocate to the former to protect against losses in the latter. As the experiences in February, September and October demonstrate, this presumption is totally wrong. Equities have been smoked while the Composite
Check out this triple somersault with four and half twists from Cities Minister Alan Drudge: Moving migrants into the regions and smaller cities would help fight climate change because congestion in Australia’s largest urban centres will fall, according to Population and Cities Minister Alan Tudge. Mr Tudge appeared on a panel at the University of
Via Tim Lawless: The latest data on the number of dwellings under construction across Australia highlights a growing settlement risk across the Melbourne and Sydney unit markets. The Australian Bureau of Statistics published building activity data this week which showed there were 227,122 dwellings under construction nationally, only slightly lower (0.6%) than the record high
Mark this one down as hoocoodanode: Couldn’t have happened to a nicer firm. Crash: It’s only the beginning…
AUD is still strong this morning, partly explained by a falling USD and partly by bullet-proof bulks: Aussie bonds have actually under-performed other nations during the correction. I assume it’s because of the bullet-proof bulks but whatever it is it’s badly misled as the housing crash gathers steam: XJO is down modestly against today: But
The free radical is back: I recorded this message for the people of Wentworth. We need to send a message on climate change. This time, don’t give the Liberals your vote. https://t.co/4Q3l2RIgpO #auspol #WentworthVotes — Alex Turnbull (@alexbhturnbull) October 11, 2018 Certainly freer than dad, at The Australian: “I disagree with Alex. His father disagrees
Peter Costello made a lot of sense yesterday for Libs: I was deputy leader of the Liberal Party for 14 years and I didn’t know that we had a right faction and a left faction and, if we did, nobody invited me to join either of them. One thing you could always unite the Liberal
The AFR offers a useful debate about gas today, though is draws all the wrong conclusions as usual. Its editorial sets the tone under the title “Solution to energy crisis should fall back on the market”: Rather than heavy-handed resource intervention, the best response is to encourage more domestic supply. That means peeling back the
Iron ore prices for October 11, 2018: Spot was down. Paper and steel firm. This market is bullet proof at the moment, supported by coking coal supply disruptions into Chinese stimulus. Fundamentals are not very good for demand over the next six months and that will dawn at some point but for now it’s all
DXY was hit hard last night as Donald Trump attacked the Fed. EUR and CNY both jumped: AUD rallied a result: So did gold: But oil was smashed as US inventories keep building: Base metals were solid: So were miners: As the EM collapse goes on: Junk improved: Treasuries were bought: Bunds too: Not Italy:
Says Professor Ross Garnaut at The Guardian: The crisis in Australia’s political system is less about the quality of individual politicians and more to do with the “majority media” and business lobby groups drowning out the independent centre for their own self-interest, distinguished economist, Prof Ross Garnaut has said. Garnaut, speaking during a panel discussion
Via Martin North:
The AUD is getting creamed this morning, sinking right to the lows: XJO is off -2%: Bonds are bid: Big Iron is down -2% as well: Big Gas a lot more: Big Gold is mixed: Big Mortgage is in free fall. CBA is at the lows and WBC plunging in free air: And it has
Via Morgan Stanley today which has cut its house price correction base case to -10-15%: We struggle to see improvement in any of our components over the next year. We now see a 10-15 per cent peak to trough decline in real house prices (from 5-10 per cent), which would mark the largest decline since
Via the AFR: Commonwealth Bank has completed only one of 153 tasks it needs to satisfy in order to meet recommendations that flowed from APRA’s special inquiry into its governance, culture and accountability. CBA had submitted evidence of another eight tasks completed from the list of 153. However, the bank missed the August 31 deadline and therefore
