Via the Property Locust: Investors using the potential for a future natural disaster to not invest in a particular location should probably not bother investing at all, according to respected property market research firm and buyer’s agency Propertyology. This summer’s bushfires followed by flooding in various parts of the nation had made some people reconsider their investment strategy, Propertyology
Maybe. Via Bloomie: German Chancellor Angela Merkel said she’s ready to consider joint debt issuance to help contain the impact of the coronavirus, an opening that could transform the finances of the European Union. The idea was raised by Italian Prime Minister Giuseppe Conte on a video conference between the 27 EU leaders on Tuesday,
Alas authorites moved too slowly on the borders and social distancing and still are, at News: Scott Morrison says Australia’s children should be going to school and there are no plans for closures, despite fears over the coronavirus. The health advice is that schools should remain open,” the prime minister said just now . “This
The Australian dollar is still trading below 60 cents: Bonds are bid after the opening yield spike: XJO is off a breezy 4%: As Big Iron sells: Big Oil has been annihilated: Big Gold is hanging in. It’s now buy the dip: Big Banks are…I’m out of adjectives?: Big Realty is starting to burn: More
Iron ore prices for March 17, 2020: The office of Chief Economist is out today with a revised outlook and see sizeable price falls ahead: For that 2019/20 average to reach $75CFR is will need to fall a fair bit into FYQ4. The good news is the free falling AUD has local prices actually rising.
Via Westpac: • The six month annualised growth rate in the Westpac– Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, fell from –0.49% in January to –0.96% in February. The Index growth rate has been running consistently below trend for 15
Via Sinocism: Yesterday’s call between US Secretary of State Mike Pompeo and Director of the Office of Foreign Affairs of the Communist Party of China Yang Jiechi clearly went even worse than thought. Since the conversation President Trump has twice tweeted about the “Chinese virus”, in what looks to be a direct response to the
Via FTAlphaville: We wrote yesterday about how the revival of dollar swap lines on far more relaxed terms was by far the most important thing the Federal Reserve has done thus far. However, there are some flaws – chief among them that there is no swap line between the US central bank and its Chinese counterpart, the
It sure as hell ain’t v-shaped. U-shaped maybe. Probably L-shaped. Via Capital Economics: As expected, slow and halting and now at risk from the vast external shock: We’ll be damn lucky if Chinese growth doesn’t reverse into shutdown as well.
Via Martin North: We have updated our scenarios, driven from our core market models. The drivers are rising unemployment, and business failure thanks to the impact of the virus. We discussed these scenarios in our live stream event last night. This is the full version with live chat. The show starts formally at 32 minutes.
Everywhere the call goes out. Just about daily, hourly even. Every greedy, Buffett-following fraud demanding we throw good money after bad. Is it true this time? Sentiment is sure stretched: We could well see a bear market rally. But: More to the point. Have we priced enough damage to earnings? Via The Australian comes Macquarie:
Bond markets. Whoa! Last night Treasury yields jack-knifed again: Why is not clear. There was rumour and scuttlebutt around Trump’s $1tr simulus. But inflation breakevens are crashing: So the Treasury sell makes little sense in terms of a punt on a v-shaped recovery and/or fiscally induced inflation. That leaves us with risk parity fund liquidation,
The pick of the Aitken brothers makes good sense today, at the AFR: James Aitken says central banks are doing the right thing as they struggle to respond to market turmoil caused by the coronavirus – and wait for medical and fiscal developments to come to the rescue. “Central banks cannot print medicines, or vaccines
DXY is off and running as the great liquidation mushrooms: The Australian dollar was destroyed to seventeen year lows: It could not even get a bid versus EMs: Gold got a bid: Oil is going to zero: Base metals not far behind: Miners are now iron ore patsies, the end: EM stocks bounced: Global junk
Via the excellent Damien Boey at Credit Suisse: With the AUD/USD down at 61c, we thought it instructive to see how it lines up with macro fundamentals. We run a “joint parity” framework to estimate the equilibrium level of the exchange rate. In other words, we assume that purchasing power, trade and interest rate parity
Via News: The New Zealand government has splashed the cash in a bid to lessen an expected coronavirus-induced recession, unveiling a $NZ12.1 billion worth of support package. A wage guarantee, welfare increases, an aviation industry bailout, tax relief and new health spending feature in the bumper package, equivalent to 4 per cent of GDP –
Nigel Stapledon is a research fellow in real estate at the Centre for Applied Economic Research at the University of New South Wales at The Conversation: It’s one of the most googled questions since the Covid-19 outbreak began: how will coronavirus affect house prices? The bottom line is it will be negative – prices will
Via S&P: MELBOURNE (S&P Global Ratings) March 17, 2020–Australian banks can absorb the increase in credit losses and disruption to funding markets due to the COVID-19 outbreak without posing any immediate or significant risks to the banks’ creditworthiness, S&P Global Ratings said today. Our analysis reflects our expectation that Australia’s real GDP growth will fall
Via Roy Morgan: In mid-March over 60% of Australian businesses report being affected by the COVID-19 coronavirus, up a massive 45% points from a month ago according to a special Roy Morgan Snap SMS Survey of 1,148 Australian businesses. Analysing the results in more granular detail shows 17% of businesses report being affected ‘A great
Cross-posted from FTAlphaville: Few things are as likely to imbue us with that sense of global financial crisis déjà-vu than a dollar swap line. Last night the Federal Reserve announced it was easing the terms on which it provides foreign banks access to greenbacks. The swap lines in four of the five locations listed in
For a day at least. Yesterday’s RBA emergency announcement dropped the WEstpac CDS price 10% to 98bps: However, VIX exploded again overnight so let’s not count the chickens. Indeed, I will be very surprised if term debt unthaws for banks any time soon despite QE coming Thursday.
Ray Dalio on what the world needs now: The Implications of Hitting the Hard 0% Interest Rate Floor While I’m going to pass along my thoughts to you, I want to emphasize that I wasn’t, and still am not, able to anticipate the most important things happening in the markets because of the extremely rare
Rather, to lie about hitting it, via Global Times: Since the outbreak of the novel coronavirus (COVID-19), media have expressed concern over the Chinese economy. COVID-19 may impact the domestic economy, but its fundamentals will remain unchanged. The engines that drive the domestic economy are just as powerful before the outbreak. The country will not
Via Domain: Up to 150,000 Australians could die from the coronavirus under the Morrison government’s worst-case scenario, as it considers advice on restricting visits to pubs, cinemas and aged care homes. Deputy Chief Medical Officer Paul Kelly said on Monday that the number of infections would be “somewhere in the range” of 20 per cent
Iron ore price charts for March 16, 2020: Still no market here to assess.
Today we’re doing a COVID-19 emergency podcast (in lieu of no RBA emergency meeting). It will cover everything from the virus spread to impacts on all markets: fixed interest, equities and property. We can’t do it live owing to quarantine so any questions you have please load in comments below before 10am. We’ll post poddy
DXY took a breather last night as markets were hit by the Fed bazooka: The Australian dollar plunged on anyway: Gold is liquidating but so far the damage is minimal: Oil is going to $10: Base metals joined the rout: Miners fell but not as much as many: EM stocks broke: Along with junk: Treasuries
In 2014, the Coalition spearheaded by Mathias Cormann opened a loophole in FOFA legislation that allowed listed investment vehicles called LICs and LITs to exclusively pay financial advisor commissions. Via the AFR earlier this year: The federal Labor Opposition has slammed a loophole created by the Coalition government that allows financial advisers to sell listed
Via Bill Evans: Today, the Reserve Bank released a Statement which was aimed at addressing liquidity issues in the Australian financial market. The liquidity policies were aimed at both the government bond market and the bank funding markets. Earlier in the day, we saw aggressive policy changes from both the US FOMC and the Reserve
You can take the girl out of Woolloongabba and the Woolloongabba out of the girl, apparently: I can’t see why there is anything wrong with prepping. Just don’t fight over it.
