David Llewellyn-Smith

1

Life after COVID not so boom

Current inflationary pressures are an inventory supercycle that will soon pass. Deutsche with the note: The US payrolls release on Friday showed employment at high-street shops flatlining for the third consecutive month at 20% below pre-COVID. Retail employment has been in decline for the last three years, but in a few months COVID has accelerated

1

Nordea: US dollar to keep rocketing

Nordea with the note: It seems as if chair Powell is already running for the hills in the average inflation targeting relationship. A few months of vastly overshooting actual inflation and Powell and the FOMC aborts the AIT-regime. This was almost faster than even we dared to anticipate, even if we have been clear frontrunners in calling

0

Equity strategists drown in Fed maelstrom

The equity market narratives coming from Wall Street are starting to sound positively hysterical. Throughout this year we have seen three dominant narratives: Good news is bad news as rising inflation will bust the stock market pushed largely by BofA. Bad news is good news as temporary inflation giving way to deflation will keep stock

8

Bye-bye Commonwealth Bank bubble?

For the past month, I have been warning of the inflating Commonwealth Bank share price bubble. Last week it reached a preposterous 22x forward earnings, far above any rational valuation and 50% above the value of its identical peer banks: This utter stupidity, doubtless driven by a mad dash for yield, even though CBA’s dividend

6

Commodity bubble turns manure pile

Truly, global markets do not understand commodity cycles. Some of this is folks talking their books. Some of it is pure ignorance. What we can say for sure is that as the commodities bubble pops, the leftover space is being filled with balderdash. All areas of the commodity market are being covered in rhetorical manure,

50

Berejilklian Government’s fascistic FriendlyJordies “overreach”

The fascistic Berejilklian Government is sinking into deeper hot water over its ridiculous arrest of a FriendlyJordies employee: Nicholas Cowdery, the former NSW DPP, said the “fixated persons” legislation was not designed for arresting comedians but for lone-wolf terrorists that pose a “risk of serious violence”. “On its face this does not seem to be

1

Nordea: US dollar to the moon

Nordea with the note: A relatively aggressive dot-plot makes for a hawkish read-through to a potential tapering time-plan towards the end of this year. We also seem to have passed ”talking about talking about tapering” to actually talking about tapering. Highlights: – 7 members of the FOMC committee expect lift-off in 2022, while 2 hikes

4

CBA bubblometer explodes

It’s getting amusing. Australia’s largest utility, the Commonwealth Bank, is being historically rerated as a wildly prospective growth stock. It has now reached 22x forward, very much in line with the kind of valuations we see for FAAMGS and similar quality stocks with spectacular growth, earnings reliability and global domination: I guess all of these

4

Schvets: Lowflation here forever now

There are not many asset strategists that are worth the time of day. Macquarie’s excellent Viktor Shvets is an exception. I agree with just about everything that he writes below. It can’t happen here–Why not? Is US really different to Japan or Eurozone? One of the most consistent macro themes over the last two decades

11

Australian dollar crashes with commodities

Sometimes markets are like taking candy from babies. The Wall Street commodities bubble is bursting. The inflation trade is caput. The Australian dollar is getting poleaxed by both. DXY has a double bottom in place and is off to the races as EUR is smashed: The Australian dollar mega head-and-shoulders top just broke. I would

10

Wolf warrior endorses Labor grovelling as Aussies recoil

How exactly is this supposed to get Labor elected? China’s chief wolf warrior, Zhao Lijian, has fully endorsed WA premier Mark McGowan: “The Australian government should heed these constructive opinions.” “Face up to and reflect on the crux of the setback in bilateral relations, abandon the Cold War mentality and ideological bias, earnestly uphold the

4

Australia the new Japan as inflation goes nowhere

Deutsche with the note that should make AUD bulls shiver: For global markets, the US April CPI was by far the most eye-catching inflation release, but there are enough indications from individual country data and now the latest PMI reports, that bottleneck price pressures are a global phenomenon. Which begs a few questions: what are

5

Phil Lowe remains uber-dovish

Below find the latest installment from an uber-dovish Phi Lowe. The AUD rose a few pips though god only knows why. This is as dovish as he could possibly get: no inflation, no wage growth, recovery incomplete, no macroprudential (which will come first). Nothing hawkish. And he sure isn’t going to tighten when so much

1

Vale dam panic resolves

As we know, I triggered about a $30 rally in iron ore prices in the past week when I reminded the market that Vale was facing another possible dam bust and crisis (or it was thew wind). The news today is that that crisis ie easing swiftly: Brazilian regulators have inspected the Xingdu damn and

0

Daily iron ore price update (rainbow butt)

The ferrous complex was weak on June 16, 2021 as spot, paper and steel all fell: There was a pretty nasty combination of factors. First this: The State-owned Assets Supervision and Administration Commission has ordered state-owned enterprises to control risks and limit their exposure to overseas commodities markets, according to people with knowledge of the

6

China booms. Not

China has released its May data and the news is boom! Not. The data is so distorted by COVD base effects that it’s still very difficult to read. Simple year-on-year and year-to-date comparisons looks outrageously good. Year-to-date growth to the end of May is 17.8% for industrial production, 25.7% for fixed asset investment and 15.4%

10

Australian dollar breaks as Fed blinks

Policy error time. The Fed has blinked and the Australian dollar just broke. Don’t cheer too loudly. My risk case for a decent market correction just firmed up. DXY blasted higher: Australian dollar was pulverised and the giant head and shoulders top is back in play: Gold was poleaxed. Oil held up but all commodities

6

Another sell commodities signal

The Bear Traps report goes full inflation. The few missing facts include that it was Republicans that ravaged the US budget, no mention of China, no reference to vast deflationary forces. This is Australian extremism not analysis. Ironically, this contrarian is a great contrarian signal. Sell metals! In 1787, with remarkable foresight, Scottish historian Alexander

0

Consumer economic confidence ebbing away

ANZ-Roy Morgan Australian Consumer Confidence increased 0.3% last week as Melbourne’s 2-week lockdown came to an end, although restrictions such as masks in public places and on travel and gatherings remain. #ausecon #ausretail @arindam_chky @DavidPlank12 @roymorganonline pic.twitter.com/BgIde4If0X — ANZ_Research (@ANZ_Research) June 15, 2021