This is what happens when a gas cartel ships too much gas into Asia so that it can gouge customers at home via an artificial shortage, via The Australian: Australian LNG producers face a slump in export revenue amid indications a global supply glut may persist up to three years longer than anticipated, depressing prices
Overreach. It’s always fun to watch. Via the AFR: Prime Minister Scott Morrison has vowed to slash government red tape to unlock investment and opened the door to industrial relations reform, challenging business to make the case for change and to deliver “shared gains” for workers and employers. In his first major domestic policy speech
Spot has not update but I believe it fell. Paper more. Steel is still stuck and is giving off a bearish signal. Last week’s rebar inventories climbed again and are now tracking materially above last year’s levels. Port stocks fell again, to 117.5mt, though the pace slowed. Steel mills are overproducing, squeezing the last drops
DXY fell hard Friday night. EUR jumped, CNY fell: The Australian dollar was firm: Despite the bounce, the market actually got more short AUD last week at -65k contracts: Gold tried and failed again to break out: Oil rose: Metals were soft: Miners too: EM stocks fell: High yield too: Treasuries were bashed: Bunds smashed:
There is no other way to put it than a complete sellout. The AFR is piling on the pressure: Senior Labor figures are leaning towards waving through the Morrison government’s full $158 billion income tax cut package but only after trying to split the legislation so the party can symbolically vote against relief for high
The AFR’s war on rate cuts took a new an ever more stupid turn on the weekend: Baby Boomers and Millennials are trading blows about who is responsible for deteriorating economic conditions that weaken their chances of home ownership or retirement security. Millennials allege profligate Boomers got a free kick from no university fees and
Via Peter Jennings at ASPI: The United States is rapidly restructuring its military presence in Asia and rethinking how it could fight a major conventional war in the area which the Pentagon has identified as the ‘single most consequential region for America’s future’. This will have important strategic consequences for Australia. The Indo-Pacific strategy report released this
Via Westpac: For the FOMC, “uncertainties” now dominate At the June meeting, the FOMC’s stance on monetary policy shifted materially. While their core view of the economy remains positive, “uncertainties” now dominate. Beginning with the core view, it clearly remains constructive. The only real economy forecast to see material revision in June was the 2019
Via ANZ: The RBA seems to be in a hurry to get the cash rate lower. Following this week’s RBA Minutes and a speech by Governor Lowe, we have brought forward the expected rate cuts to July and August. It is our expectation that the combination of lower interest rates, a much flatter yield curve
From Gottiboff come an update on the LNP’s “greatest peacetime” boom: …Nowhere was this optimism more evident than in the outer suburban land and housing development market, which had collapsed. Many people who had bought land turned their back on contracts when settlement day arrived. …There is certainly a rise in turnover but a 15
Via FTAlphaville: The pace at which China is selling its holdings of US Treasuries has accelerated dramatically since the beginning of 2018. Against the backdrop of the escalating US-China trade war and other protectionist measures, the move has sparked concerns that China is actively weaponising its position as the largest foreign creditor to the US government. The fear is
We’ve already been through it. Ever since 2011 the RBA has tried to drop the Australian dollar with rate cuts, or has not lifted rates owing to the fear of a rising Australian dollar. This is what triggered the entrance of APRA into macroprudential policy in 2015. Since then a gulf of diffused responsibility has
Via CBA: Flash PMI data for June signalled a further pick up in growth momentum across the Australian private sector. Output and new business both expanded at the steepest rates for seven months amid reports of firmer underlying demand conditions. Consequently, outstanding workloads rose solidly, leading firms to raise their staffing levels for the second
Spot at new bubble highs. Paper even higher. Steel is still going nowhere indicating that steel mill margins are getting smashed. The charts: For me the news of the return of Brucutu is the beginning of the end for the bubble. There are further supports ahead: the PBOC will cut interest rates the moment that
Yesterday we saw regulatory capture out in the open at the AFR: Westpac has unleashed a fresh wave of property lending by relaxing serviceability conditions on low risk home loans, immediately increasing the borrowing capacity of aspiring home owners by as much as 8 per cent. A spokesman for Westpac confirmed the policy change saying credit officers
The always evil AFR editorial is at it again: Encouraging indications that the Narrabri gas project will go ahead by the end of the year despite the obstacles stacked against it shows the right way to fix Australia’s energy crisis. Santos is spending $3 billion developing 850 coal seam gas wells in north-western NSW, and
DXY was clubbed lower last night and CNY plus EUR jumped: The Australian dollar was mixed against DMs: And EMs: Gold soared but needs to break above $1400 to indicate more gains: Oil rocketed as the US mulls Iran strikes: Metals were higher: Big miners too: EM stocks jumped: Plus junk: The Treasury curve was
Via the AFR: Westpac has unleashed a fresh wave of property lending by relaxing serviceability conditions on low risk home loans, immediately increasing the borrowing capacity of aspiring home owners by as much as 8 per cent. A spokesman for Westpac confirmed the policy change saying credit officers would now have the discretion to approve principal
Via The Australian: Australian energy producers have slammed a move by the Coalition to consider domestic gas reservation, arguing the interventionist measure wouldn’t lower prices for local users but would significantly increase the nation’s sovereign risk profile. …Cooper Energy, which is building the Sole gas project off the Victorian coast, said a reservation policy would
Via CBA: Lowe signals another cash rate cut is imminent Following Lowe’s speech today we are now expecting the RBA to cut the cash rate in July rather than August. We expect another 25 basis point cut later in year, probably November, taking the cash rate to 0.75%. Once again, the RBA have emphasised that
Via Goldman comes the market for anything: Given the assumption that the observed datapoints are normally distributed, barometer readings can be seen as the market-implied probability for a “trade deal” if one believes the historical highs (Jan 19) or lows (Mar 18) over the past 18 months are in fact reasonable representations of those outcomes.
Only eight years late comes Phil Lowe: I would like to thank CEDA for the invitation to address this lunch. It is a great pleasure to be back in Adelaide and to participate in another CEDA event. Those of you who follow the RBA closely would have noticed frequent references to the labour market in
Honestly, our regulators are the biggest pack of no-hopers, via the AFR: The psychologist inserted by the corporate regulator into boardroom discussions of more than 20 blue-chip companies including Qantas, Woolworths and AMP warns that Australia’s financial sector culture is broken. Elizabeth Arzadon, the regulator’s psychologist of choice, also warns that resistance by boards to
The Australian dollar is soft in the circumstances of a falling DXY today: Bonds are madly bid: XJO is thundering towards record highs as the equity risk premium surges: Dalian an outright bubble now, ignoring all bad news: Not so much Big Iron: Big Gas is ignoring bad news too: Big Gold is moon shooting
Via John Hewson today: Our positions on China virtually blow in the wind. It seems we simply hope to muddle through, rather than to develop and respond in terms of a well thought out and defined longer-term strategy on our relations with China. This, in itself, undermines our credibility in Chinese eyes, a nation that
Via BNAmericas: Brazil’s supreme court of justice has authorized local miner Valeto resume operations at its largest iron ore asset in Minas Gerais state, the 30Mt/y Brucutu complex. In a release on Wednesday, Vale said that the decision will allow the full resumption of wet processing operations at Brucutu within 72 hours, thus increasing the average
APRA released quarterly ADI property exposures yesterday. It is a great guide to many things but I use it mostly to track interest only mortgages. The good news is that the interest only mortgage bubble that drove the last leg up in Australian house prices is now massively de-risked. The March quarter saw IO mortgage
Via Bloomie: China’s central bank has acknowledged its monetary tools are insufficient. The most powerful ones are proving too blunt to drill through a hardening financial system. The country’s money markets have been shuddering since regulators took over Baoshang Bank Co. last month, despite initial assurances from the central bank and other authorities that they would maintain ample liquidity.
Via Bloomie: As hundreds of thousands of protesters march in Hong Kong’s streets against unpopular China-backed extradition legislation, another battle is unfolding across Beijing’s Great Firewall. Photos and information about the biggest protests since the handover of the former British colony are being systematically wiped from China’s internet. Meanwhile, Chinese state media is pushing a
On and on it goes, at all news highs again: And still there is no curve steepening. Indeed the belly of the curve inverted more deeply than any time in this cycle: We could not outdo US bonds and the spread narrowed: It is the end of inflation.
