MB often works with international hedge funds on the Aussie economy. I recall the reaction of one from the US when he discovered that, unlike US fixed rate mortgages, Australian mortgages are all floating rate. He declared immediately: “Households must all pray for the next recession!” Why? Because that meant cheaper repayments for the overwhelming
Houses and Holes
The US dollar sagged Friday night as EUR keeps pumping higher: That was enough to drive the Australian dollar higher against all DMs: It was mixed versus EMs: Gold is still deflating trade war safe haven trades so is missing the DXY input for now: Oil was calm: Copper firm: Miners soft: And EM stocks:
Here we go, via AFR: Australian smelters are struggling under high power costs and weak aluminium prices, and their reliance on fossil fuels is also becoming a competitive disadvantage, with Alcoa signalling that reducing its carbon footprint was an important goal of the “review” under way into almost half its global smelting fleet. …Federal Education
There are few greater proponents of the mass immigration economic model than David Crowe at Domain. At least, there were. He used to defend it at every turn. Produced ridiculous propaganda. And declared it was impossible to cut. Not any more. Today Crowe finally saw what MB has seen for many years. That mass immigration
Via Argus: Higher pollutant emission standards for China’s steel industry continued to drive the country’s steel scrap usage for steel production higher in the first six months of this year. Chinese steel scrap consumption rose significantly, by 20.7pc on the year to 103.28mn t in January-June from 85.57mn t in the same period in 2018,
September QTR Chinese growth hit its lowest level since whenevs today at 6%: Internals all surprised to the upside, which is no surprise at all, given the need to not lose face in the trade war. Industrial production roared back at 5.8%, fixed asset investment held at 5.4% and retail sales pumped up at 7.8%.
So say the excellent Damien Boey at Credit Suisse: RBA Deputy Governor Debelle has just delivered a “glass half-empty” speech about the housing construction cycle. Key points were as follows: 2020 shapes up as being the low year for residential construction, but the Bank can see through the trough to the other side. Long lead
Via Herald Sun: A close friend of Liberal MP Gladys Liu last year set up a group to campaign for China’s controversial Belt and Road Initiative within Australia and the Pacific. Prominent property developer Chen Guo Jing has been described on Chinese language sites as the “implementer” of the Australasia Belt and Road Advocacy initiative.
Via RBA foghorn, Terry Mccrann: It will leave its official interest rate unchanged at its regular and decidedly idiosyncratic Cup Day meeting. Leaving the rate unchanged was already the most likely outcome of the meeting before Thursday’s monthly jobs data; the continuing good news on jobs made it a slam dunk. …The next rate cut,
The tax cuts are clearly doing bugger all, entirely predictably, so what’s the answer to a flagging economy? More of the same of course! Via AFR: Labor, had it won, would have offered an income tax cut for people earning up to around $120,000 but would not have proceeded with the Coalition’s stage two and
Texture from Reuters: Trade tensions between the United States and China, the world’s two largest economies, are a significant source of risk for the global economy, with “real spillover effects” for emerging markets, top IMF officials said on Wednesday. demand in top consumer and producer China is forecast to grow just 1% next year, compared
DXY slumped last night as EUR took off: The Australian dollar launched against DMs: And EMs: Gold rose: Oil too: Metals not so much: Nor big miners: EM stocks are breaking out: With junk: Treasuries were sold: Bunds bid: Aussie bonds belted: Stocks sure do look poised for higher: It was another double bunger evening
Let us recall where it all started. The Harvard Kennedy School’s Center for International Development has developed an Atlas of Economic Complexity, with Australia being ranked as having one of the least complex economies. The Atlas measures the diversity and sophistication of national exports, with almost all of Australia’s exports not requiring a degree to
From perhaps Australia’s greatest ever economic hypocrite, via Domain today: Former treasurer Peter Costello has blamed ultra-low interest rates for fuelling global political extremism and accused the Reserve Bank of focusing on global currency movements rather than the Australian economy when setting monetary policy. Speaking at the Citi Australia and New Zealand Investment Conference 2019
Via Wood Mackenzie: There has been an uneasy tension around hard coking coal (HCC) prices for some time. Few would argue that US$200/t prices for seaborne HCCs were sustainable. But at the same time, the market had become accustomed to sky-high prices, kept artificially strong while China focused on restructuring its steel and coal sectors.
Via SCMP: A building frenzy in southern China’s answer to Silicon Valley has driven the vacancy in Grade A offices to a record high, putting the squeeze on part-time developers whose blind inexperience have led them into the industry. A record 1.79 million square metres (19.27 million sq ft) of vacancy, equivalent to 10 of
From Nathan Attrill at Lowy Interpreter: In a week which began with images of Xi Jinping waving at his own giant portrait in a military parade for the People’s Republic of China’s (PRC) 70th anniversary, it ended in an even more surreal manner – with a cartoon Winnie the Pooh being strangled to death in
Via Wood Mackenzie: International gas and LNG prices have collapsed. For most of 2019, the global market has seen improving gas supply and intense supplier competition result in lower prices. In August 2019, Asian spot LNG prices went below U.S.$4 per million British thermal unit (mmBtu) (A$5.70 per gigajoule (GJ)), two and a half times
The ABS is out with September Labour Force and the news is decent: SEPTEMBER KEY POINTS TREND ESTIMATES Employment increased by 20,200 to 12,942,800 people. Full-time employment increased by 9,000 to 8,840,200 people and part-time employment increased by 11,300 to 4,102,600 people. Unemployment increased by 1,600 to 718,000 people. Unemployment rate remained steady at 5.3%.
Via Washington Post: U.S. and international law enforcement authorities have shut down one of the world’s largest child pornography websites following a raid and the arrest of Jong Woo Son, the underground site’s alleged South Korean-based administrator, federal officials said Wednesday. Federal prosecutors with the U.S. attorney’s office in Washington, D.C., and IRS and Homeland
Via BofAML: Tweeting the October Global FMS #bottomline: Oct FMS shows investor sentiment bearish despite credit & equity rally; if trade war and BREXIT fears unrealized in Q4 then macro can beat expectations validating our contrarian bullish view. #up-in-cash: FMS cash levels up to 5.0% from 4.7%, leaving BofAML Bull & Bear Indicator at an
Via SEEK: “We are seeing a slight improvement in the market with the rate of job ad decline moderating, with September at -7.4% compared to August, which was -8.6%. Month to month we continue to see growth come from the large employing sectors of Community Services and Development which has seen a jump from 13%
Yeh, they’re onto it at last. Deputy Governor Guy Debelle today: The housing market has a pervasive impact on the Australian economy. It is the popular topic of any number of conversations around barbeques and dinner tables. It generates reams of newspaper stories and reality TV shows. You could be forgiven for thinking that the
Via Domain and drawn from the OMG files: A University of Queensland student has sought a court order similar to a restraining order against the Chinese Consul-General in Brisbane, Dr Xu Jie, who he claims has endangered him by describing him as an anti-Chinese separatist in a statement published on the Consul-General’s website. Drew Pavlou,
L-plate Treasurer Josh Recessionberg continues down his self-destructive path today. Via the AFR: In an interview with The Australian Financial Review before flying to an International Monetary Fund meeting in Washington DC, Treasurer Josh Frydenberg said restoring the budget to surplus was not a vanity exercise but integral to the government’s plan to buttress the
Texture from Reuters: Benchmark Dalian iron ore futures slumped in morning trade on Wednesday, extending losses into a third session, after China’s top steelmaking city of Tangshan issued a second-level smog alert that requires mills to further limit operations. …The losses widened further after China outlined its annual anti-pollution plan for winter in a document
DXY fell last night as EUR lifted: The Australian dollar was mixed against DMs: And EMs: Gold firmed: Oil too: Not metals: Nor miners: EM stocks are trying: So is junk: The Treasury curve flattened: And bunds: Aussie bonds copped it: And stocks eased: Westpac has the wrap: Event Wrap US Sep retail sales missed estimates, though this