Via Martin North today: DFA has released the final dimension from our household surveys to end November 2018, zeroing in on financial confidence. As is perhaps predicable, the overall index fell again, down to 87.8, well below the neutral setting, and close to the record low we measured in 2015. Property owning household segments continue
Via The Australian: The Morrison government is expected to formally recognise Jerusalem as Israel’s legitimate capital following a cabinet meeting today, but may delay the relocation of Australia’s embassy from Tel Aviv. Senior government sources have confirmed a final decision was made by cabinet’s national security committee last night. It is believed the option favoured
Via Capital Economics: The conventional view of the long-term prospects for the global economy can be summarised as: EMs good, DMs bad. Like most things, however, we suspect that the conventional view is likely to be wrong. Last week we published our first Long Term Global Economic Outlook, which sets out forecasts for the major
Via the AFR comes Australia’s BCA head and chief energy wrecker, Grant King: “In the last four terms of parliament, two under Labor and two under Coalition governments, we have lurched from one extreme to the other in terms of policy outcomes,” Mr King said on Monday night. “The most recent idea from government has been
The Australian says: Escalating China-US trade tensions pummelled the Australian sharemarket yesterday, pushing the local bourse to record its third $35 billion-plus wipe-out in as many months. The benchmark S&P/ASX 200 index took a 129-point, or 2.27 per cent, dive to 5552.5 points, its lowest level since December 2016 and just shy of a two-year
Via Goldman: AUD/USD has had a round trip since the G20 meeting last weekend, initially rallying on the US-China ‘truce’ before falling on weaker GDP data and perceived dovishness from the RBA Deputy Governor Debelle. In our view, Deputy Governor Debelle’s comment that although the next move is likely a hike “there is still scope
DXY rebounded last night. CNY and EUR were weak: AUD lifted a little versus DMs: CFTC was out late and showed another small draw in shorts to -50.8k: And was mixed against EMs: Gold held its gains: Oil dumped again. It requires US output to slow: Base metals were weak: And big miners: EM stocks
Iron ore price charts for December 10, 2018: Spot down. Paper stable. Steel is breaking down. Mills margins will stay under pressure and it will hit bulks once past the new year restock.
Via Jonathon Shapiro at the AFR late yesterday: Housing bears are famous for hearing what they want to hear. And last week, Reserve Bank assistant governor Guy Debelle made it very easy when he dared to suggest that “quantitative easing” was a policy option. For the bears, who appear to be revelling in each set of weak auction
Mirabile dictu, Crikey’s Bernard Keane has finally discovered the real problem: …while much of the political and media class were obsessing about some asylum seekers last week, our understanding of the economy changed significantly in the wake of the September quarter GDP figures and the reaction of the Reserve Bank about where interest rates might
Dick Wakelin capitulates today: Sydney and Melbourne prices are likely to drift downwards in the first three to six months. That forecast is based on continued lending tightness by the banks until the dust settles after the publication of the final royal commission report in February and a general skittishness of participants. The downward trajectory
Yes, you read that right, from The Australian: British billionaire industrialist Sanjeev Gupta, backed by heavyweight Chinese investors, plans to build one of the world’s largest steel plants in Whyalla, 380km north of Adelaide. Flanked by Scott Morrison, Bill Shorten and South Australian Premier Steven Marshall at this morning’s announcement, Mr Gupta said construction of
And so it begins, from Goldman which has been far too hawkish this cycle all along: Relative to the turmoil in the financial markets, the economic numbers have been remarkably stable recently. Admittedly, jobless claims have risen and November payrolls fell somewhat short of expectations. But a report showing 155k new jobs and a decline
Via Goldman: …two challenges brought us here. Internally, policymakers’ efforts to constrain the growth of shadow banking and reduce financial risks worked almost too well. Financial regulations introduced in 2017 and early 2018 led to a meaningful contraction in shadow banking, which slowed overall credit growth and tightened credit conditions, particularly for private companies. And externally,
Oddly enough it’s coal, from Clyde Russell: It’s not shaping up as a merry Christmas for coal exporters to Asia as the region’s top buyers, China and India, pull back from the recent trend of strong imports. The Chinese authorities appear to be making good on a commitment to try and limit the country’s imports
The Australian dollar has gapped lower this morning on lousy Chinese data: XJO is down heavily and looks likely to close at new two year lows: Bonds continue to boom: Big Iron is solid on hopes of MAOR from Pooh of China: Big Gas is down despite OPEC: Big Gold is flying as the Fed
From RBA boffin Christopher Kent today: Thank you for the opportunity to speak at this Bloomberg event today. I’d like to address some issues about how monetary policy decisions taken elsewhere influence interest rates here in Australia. Australia is a small open economy that is influenced by developments in the rest of the world. Financial
Because the Smart Country always gets more stupid. From the OECD today: Dumbening our way to success one stupider student at a time.
Via the AFR: Energy producers and investors are regarding a possible Labor government after next year’s general election as offering the prospect of a defined energy policy that, while potentially tougher for the industry in some areas, will at least bring an end to what some have described as “almost uninvestable” situation under the Morrison
Here’s is what a green looks like: Here is what a Tampa green looks like: And here is what The Greens look like when you put them together: A NSW Greens MP has lashed out at the “destructive extreme left forces” in her party after members formally asked fellow MP Jeremy Buckingham to step down.
Via Domain: Exclusive Herald polling revealed One Nation has a primary vote of 7.5 per cent statewide, while internal Coalition research indicates minor parties could secure as much as 20 per cent of the primary vote in some seats. One Nation alone is polling in the “low double digits” in some areas. The Coalition needs
Via FT: China has summoned the US ambassador in Beijing to demand the cancellation of an arrest warrant for Meng Wanzhou, chief financial officer of Chinese telecoms company Huawei, in the latest sign that her detention is souring relations between the two powers. Beijing also threatened Canada with “serious consequences” following the arrest of Ms
It’s the Scummo wipe out now, via Newspoll: The results of the final Newspoll of the year show the Coalition’s primary vote at 35 per cent, Labor’s at 41 per cent and a two-party-preferred split of 45-55, which would equate on a uniform basis to the loss of 21 seats for the government. Alas for
Iron ore prices for December 7, 2018: Spot up. Paper up. Steel up. Coking coal is very strong but I don’t think that can last. Chinese iron ore port stocks continue to draw down, hitting 138.6mt last week. Chinese imports of iron ore for November were at 86.2mt and the year is tracking below 2018
From the OECD today: The latest OECD Economic Survey of Australia, to be released on Monday 10 December, assesses the continuing robust growth of the Australian economy, as well as the challenges to ensuring sustainable and more inclusive growth against a backdrop of globalization and technological change. The Survey discusses how Australian can limit financial sector risks,
It is a laugh a minute now for the politico-housing complex. First up the RBA, which “economists” say was actually bullish last week: Economists believe the market misinterpreted comments by Reserve Bank of Australia deputy governor Guy Debelle, whose speech on Thursday was received as dovish but in fact was “frank” and consistent in substance
I put it to you that this is one major reason why Sydney property is crashing and Melbourne trailing it down. From Domain: Foreigners are again making an impression on Sydney’s trophy home market but it isn’t the purchase of high-end mansions and penthouses keeping agents busy. It’s all about selling the Sydney home. Experts
DXY was soft Friday night. EUR and CNY strong: AUD was hammered across DMs: EMs were mixed: Gold broke higher: Oil tried on a robust OPEC deal but couldn’t: Base metals were soft: Big miners down: EM stocks too: And junk: Treasuries were bid bigly: Not bunds: Stocks slumped again: Westpac has the wrap: Market
China release trade and inflation data over the weekend and both showed it is slowing sharply. For trade, exports were 5.4% year on year and imports 3.0%, both large misses to expectations. The trade deficit is still large at $44.7bn: Inflation was also concerning. The CPI decelerated sharply: Aided by petrol: And the PPI slumped
I still have a third hypothetical bet open with Bill Evans that the next move in rates is down (having won the first two, not that he knows about it). I reckon the RBA will be cutting by June 2019. It would be earlier if not for the elections.
