Global markets are convinced that China is about spring from its credit funk but so far it ain’t. December credit was decent at 1.59tr yuan with 1.08tr in bank loans but hardly tearing it up: Shadow banking had a better month: The three month moving average for new credit flopped into the positive: There is
DXY was up Friday night. CNY is going mad. EUR was down: AUD is tracking the runaway CNY against DMs: And blasted away from EMs as well: This has absolutely nothing to do with the sagging local economy. It is a counter trend rally on the lifting trade war, pausing Fed, US government shutdown and
Via Reuters: China plans to set a lower economic growth target of 6-6.5 percent in 2019 compared with last year’s target of “around” 6.5 percent, policy sources told Reuters, as Beijing gears up to cope with higher U.S. tariffs and weakening domestic demand. The proposed target, to be unveiled at the annual parliamentary session in
The Australian dollar popped and dropped on today’s Black Friday retail illusion. But the path of least resistance remains up: Bonds are consolidating: XJO is flat: Dalian too: Big iron is soft: Big gas still rising: Big gold is struggling at breakout levels. Goldman upgraded it today. Sell! Big banks are soft too: Big realty
Via The Guardian: The senior bureaucrat who reviewed building regulation for the New South Wales government has condemned the lack of action on his 2015 report, warning the defects in the Opal Tower at Sydney’s Olympic Park “are likely just the tip of the iceberg”. Michael Lambert, the former secretary of NSW Treasury, was commissioned
Via The Australian: Unions will use a seven-day strike next week to intensify pressure on the Coalition and business over the “exploitation” of labour-hire workers, declaring public unrest at employer conduct will be a “vote-shifter” at the federal election. The Construction Forestry Maritime Mining and Energy Union yesterday revealed workers at the Wollongong Coal-owned Wongawilli
Via Damien Boey as Credit Suisse: In recent articles, we have talked about the tail risks from central bank balance sheet reduction globally. Overnight, we have seen central bankers wax and wane in their positions: After suggesting recently that balance sheet reduction need not be on “auto-pilot”, Fed Chair Powell has come back saying that
Drip, drip, drip: “The decision to increase interest rates is never easy. “We have absorbed higher funding costs for the last twelve months in order to delay the impact for our home loan customers. Unfortunately, funding costs remain high and are likely to remain elevated into the foreseeable future.” 20bps on front and back book.
This time GAP: Shade cloths for housing. Rule number one of any profit warning is blame the weather. Of course it could never be this:
The Australian economy is stalling as its key drivers sputter. Fiscal investment is plateauing as infrastructure hits a air pocket, via ANZ: There was a significant pull forward last year: Dwelling construction is about to crash: As house price falls power down: Which is also killing consumption, via CBA: Business investment is OK but capex
Via COMMSEC: CommSec Luxury Vehicle index: For around a decade, CommSec has been tracking an index of luxury vehicles. Changes at the ‘top-end’ of markets – vehicles, houses and other assets – have tended to lead activity more broadly. We update the latest trends in luxury vehicle sales. Luxury vehicle sales: The CommSec
Iron ore prices for January 10, 2018: Nothing burger action again. Port Hedland December shipments rebounded strongly as BHP got its trains running again. But Q4 shipments were down 3% year on year which won’t help Q4 GDP.
DXY was up overnight, CNY too but the EUR was hit: The Aussie dollar is everybody’s best friend now: EMs even more: Gold was hit: Oil soldiered on: But it faces a big problem in US reserve accumulation which is much higher year on year: Base metals are still telling the truth: Big miners fell:
From the AIG: Australia’s next economic downturn has begun. Full report.
A recession election is coming. We may not be in an actual two quarter growth draw down by May but will feel like it and will likely to be happening in per capita terms. Here’s my best guess for where we’ll be at by May: How will this impact the election? The Coalition is planning
So that it could pump us coolies for all we’re worth, via The Australian: Embattled public broadcaster ABC has underpaid up to 2,500 casual employees over the past six years. In a statement on the ABC website, the corporation said it “recently identified that some casual employees have been underpaid.” “A detailed review is underway
Via the FT today: Free iPads, rental guarantees and an eye-watering A$100,000 ($72,000) off the price of an apartment are some of the sweeteners on offer from property developers amid the worst housing downturn in Australia for 35 years. … according to Morgan Stanley, which warned this week the slump could torpedo Australia’s run of 27
Chinese inflation for December is out and it’s adieu price pressures as growth fades: In December 2018 , the national consumer price rose by 1.9% year-on-year . Among them, the city rose 1.9% , the rural rose 1.9% ; the food price rose 2.5% , the non-food price rose 1.7% ; the consumer price rose 1.7% , and the service price rose 2.1% . In December , the national consumer price ratio was unchanged from
Via The Australian comes Mark Latham campaigning in Western Sydney: …According to Mr Latham, the Berejiklian government’s much-vaunted “hi-tech Disneyland” vision for the area was another casualty of the state government’s “disastrous lack of planning” and its failure to manage the city’s migrant “population explosion”. …“If you can’t build a couple of tram tracks on the
The AUD is marching higher again today though it’s not lifted much from overnight: Aussie bonds are bid again as they sniff out the bunkering consumer: Stocks are flat: Big Iron is mixed. Presumably BHP is ex-div: Big Gas is tracking oil higher: Big Gold is still warm: Big Banks are still in the dead
Via FTAlphaville: From Sydney to New York to London, it is not uncommon to find renters praying for a collapse in house prices. But when a significant number of homeowners want the same thing, something strange is going on. This was the situation in Vancouver in 2016. The city – buoyed by money flowing in from China
Via The Australian we get another glimpse of how far behind the economy are our illustrious leaders today: Josh Frydenberg says he will deliver a surplus budget before a federal poll, despite doubts cast on that commitment by a global ratings giant and the possibility of an early election. In contrast to the government’s December
Via the AFR: Beauty and home products retailer Crabtree & Evelyn is the latest retailer to fall victim to lower discretionary spending by under-pressure households, with restructuring experts KordaMentha appointed to close down the entire Australian network of stores. …The company has 12 stores across Australia in the country’s most prominent shopping centres…Rents for specialty
Australia’s most bullish senior economist has come face to face with fact this morning. From Michael Blythe at CBA: Hoocoodanode that crashing house prices and wages would kill consumption? The lunatic RBA is miles behind the curve.
Zero Hedge has some hints today: Over the weekend, when commenting on the latest rather disappointing RRR cut out of China (which would release just enough liquidity to offset liquidity drains via the MLP and repo) we pointed out another, far more important event which took place in late December, when traders were generally away on vacation,
The consumer is buckling:
Via Platts: A total of 16,900 MW of U.S. power generation capacity retired in 2018, according to S&P Global Market Intelligence data, far more than the 11,569 MW retired in 2017. Coal-fired capacity made up nearly 70% of the capacity retired in 2018, totaling about 11,800 MW, despite efforts by the Trump administration to ease regulations
Via The Australian comes KPMG catching the falling knife: Peak-to-trough adjustments in dwelling prices are expected to be minus 12.9 per cent in Sydney and minus 4.5 per cent in Melbourne. KPMG chief economist Brendan Rynne said tighter lending standards by APRA and less investor financing had taken its toll. “There has been a falling
Iron ore prices for January 9, 2019: All soft. Bloomie carries some warnings: “The $75 a ton iron ore price is not sustainable for two reasons,” the Goldman analysts said. “First, part of the rally was fueled by mills restocking ahead of the Chinese New Year. Second, supply is set to increase in 2019.” Morgan
From the ANZ/Property Council March QTR survey of property industry insiders: I would like to bring you more but the results seemed to have so horrified the Property Council that they’ve not uploaded the documents. Anyways, a few points of note: east coast sentiment is collapsing; SA is deluded; amusingly, WA still thinks the recovery
