When one sits around all day reading Wall Street research, patterns emerge. One is that professional managers very obviously read one another’s stuff and copy it. Another is that Wall Street likes to find a kernel of truth in some market, blow it out of all proportion, and inflate a bubble so it can front-run
UBS with the note: April home loans up-crash 86% since May; average OO loan jumps 20% vs Aug The housing market ‘up-crash’ is still accelerating. Home loan values in Apr-21 surged 3.7% m/m, to a record high, up 86% since May-20. Average loan size since Aug-20 jumped 20% for owner-occupiers to $542k; & investors +10%
The ferrous complex went a bit haywire yesterday with prices all over the joint. Spot jumped. Paper roared overnight. Steel fell: There’s not much new here. We’re just be pushed around within a range. That said, steel mill margins are still getting belted which is a major warning for iron ore going into EOFY. In
Thank god. My sixth fuckdown will likely end tomorrow tonight: Reported yesterday: 1 new local case, 0 new cases acquired overseas. Got symptoms? Get tested. – 19,533 vaccine doses administered – 28,485 test results received More later: https://t.co/lIUrl0ZEco#COVID19VicData #COVID19Vic pic.twitter.com/wc5BUgm6OK — VicGovDH (@VicGovDH) June 8, 2021 Some restrictions remain and it will be a staged
Australia’s evolving Cold War 2.0 circumstances continue with stunning speed. The personality-disordered PM is on the hustings today with a new round of China-bashing: Morrison has warned about an emerging struggle between authoritarianism and liberalism. The Indo-Pacific is its epicentre with the rising risk of conflict. He aims to reform the WTO to fight economic
Forex is paralysed again as we await the US inflation print on Friday. DXY and EUR were stable: AUD was unmoved against all crosses: Oil’s march slowed as gold fell: Base metals were mixed: Miners too: EM stocks eased back: Junk is fine: US yields are selling the inflation fact: Which is giving growth stocks
Good stuff from ANZ on iron ore. All points I have made. Copper is also at risk as China slows. On oil, expect an Iranian deal.
Australia’s nemesis, The Global Times, is back today with more Australia bashing: #Australia has good reason to diversify its #ironore exports to #China ASAP. According to Rafael Suchan, CEO of Germany’s Scholz Recycling Group, China’s iron ore imports will be nearly halved by 2030 with the help of steel scrap #recycling. pic.twitter.com/X9mEJmoekD — Global Times
The NAB business survey used to be a quite useful forecaster of GDP and its segments. These days it’s become more like a PMI, only useful for directional rather than positional judgements. To wit, this is an unprecedented boom across all metrics: Capacity utilization has been pushed the highest measures in living memory which would
BofA with the note: The economy is facing an imbalance: a burst in demand has been met with constrained supply. Economics 101 tells us that when the demand curve shifts more than the supply curve, prices will rise, which continues until the balance is restored from a combination of slowing demand and greater supply. This
Readers will recall that there has been something a mystery in some components of the very steep slowdown in Chinese debt issuance over the last four months. Most pointedly, local government borrowing, which accounts for a lot of infrastructure and property investment, cratered 80% year on year in the four months to April despite having
As Morrison’s Prison Island falls ever further behind in the vaccine race, the northern hemisphere is beginning to open up to tourism. Europe is preparing to launch vaccine passports. Domestic US tourism is exploding higher. Now Canada is leading the reopening of borders to the vaccinated: Wokester Justin Trudeau is considering easier border controls. The
Economically speaking, Australians are very fortunate people. We are also some of the most ignorant. These truisms are played out superbly in the least understood yet most important feature of Australian markets. What’s the best asset hedge in the world? This, via BNP Our analysis has two stages: a historical assessment of the most reliable
Morgan Stabley bearing it up: Over the past few weeks, we’ve been spending a lot of time with investors discussing and debating our mid-year outlook. Here are the highlights: First,investors are definitely more receptive to the mid-cycle transition narrative that we introduced a few months ago. There’s an acknowledgement that something has changed in the
The ferrous complex was universally weak on June 7, 2021. Spot fell. Paper tumbled. Steel was whacked. That this all happened on the day that Brazil plugged another dodgy dam is not a sign of market strength. The proximate cause was mediocre Chinese trade data. Iron ore imports for May were lousy at 89.79mt and
There is no doubt that Australia has the worst vaccine rollout underway in the developed world. Bar none. It is the slowest, most troubled, and worst handled. Via Goldman: I am locked down today for the sixth time directly as a result of this failure and Morrison’s other screw-up, failing to centralise quaratine in the
The Australian dollar was firm again last night as DXY came off hard and EUR rallied: AUD was firm on the crosses: Oil fell, gold lifted: Metals were subdued: EM stocks marked time: Junk is fine! US yields firmed a bit: But the great inflation trade is looking weary as tech shapes up for another
For a long time, S&P was the last of the semi-credible ratings agencies as it kept the pressure on Australia’s AAA rating because of its contingent liabilities in the banking system. It did so by insisting that the budget return to surplus across the cycle so that net debt did not surpass roughly 30% of
I have been warning of this for nearly a decade as I watched various Australian investment legends blow themselves up in China, including Kerr Neilsen and Hamish Douglass. Investing into China is foolish for one simple reason: the sovereign risk is off the chart. This is not an academic measure of risk. Nor is it
Some interesting sector-level trends in US credit card spending. Services spending is normalising swiftly as reopening gathers pace. There are early signs that goods spending is falling away as well: Eating out is now up on pre-pandemic levels. Travel is roaring back to almost unchanged from 2019. I expect a big overshoot ahead. Interestingly, goods
TS Lombard with the note After leading the recovery last year, real estate investment is set to decelerate under macro and sector-specific deleveraging campaigns as well as higher input costs. We expect property investment to reach 5% yoy in H2/21 from13% you in April. The slowdown will hit local government financing and investment. The combined
Watch out for a short squeeze. Via Goldman: Over the week ending June 1, non-commercial traders net sold $0.9bn USD, after net sales of $1.4bn USD in the week prior. Both asset managers and leveraged funds appear to have contributed to the net Dollar sales. Traders net sold Dollars against net purchases of EUR, JPY,
Enjoy the latest twist in this “new asset class” of 100% horseshit.
The ferrous complex was mixed Friday with spot down, paper up overnight and steel firm as well. But that all misses the point. This market is showing signs of early trouble: Why am I getting nervous? CISA late May steel output fell heavily: It is not unusual for May production to pull back a little
When your choice is between a deeply corrupt rape protection racket versus the plaything of an evil foreign power what are you to do? Make it zero all: The rape protection racket must now be a slight favourite to win despite violently alienating the female half of the electorate. To wit: Frank Zumbo, the long-serving
Australian triumphalism is on the march. We’ve come through another global shock with the housing bubble intact. We’re cock-a-whoop! Like the GFC, the performance is being put down not to hard work or sacrifice but dirt. Iron ore is apparently responsible: Australia can thank the booming price of its biggest export iron ore, which currently
Forex did a full-blown reversal Friday night. After readying for tearaway US jobs and a rising DXY, instead we got Goldilocks numbers and violent jack-knifing as yields were clubbed and risk bets roared back. DXY and EUR changed places: Australian dollar hit a trampoline: Gold firmed. Oil is off and running: Base metals were subdued:
Nordea with the note. I see US inflation tumbling next year: We see clear risks of a big positive surprise to the May inflation report as well with core inflation around or just above 4%. The market is still buying the transitory inflation narrative but for how long? Lately, increasing (US) inflation has been the
Not according to Bill Bishop at Sinocism: Comment: David Bandurski of the China Media Project has written an excellent article on the Politburo’s collective study session on global discourse power and the wishful thinking in some quick takes about a change in tone/halt of “wolf-warriorism”. He provides good background on the discussant, Fudan University professor
Bill Evans at Westpac with the note: The RBA Board is likely to decide that there will be no extension of the YCT to the November 2024 bond at the July Board meeting because such action would imply no tightening till 2025. Westpac disagrees with that interpretation but cannot dispute the resulting decision. Not extending
