I hate agreeing with Goldman, especially on Australia, where it has been horribly wrong for years (being far too bullish). To be honest, the cross-over with mine and the GS view is minimal. The RBA is going to cut. And that will pressure the AUD. But I do agree that the AUD has a good
The Aussie dollar is soft this morning: Bonds are well bid on the approach of widely expected weak CPI: Which has helped push XJO to 2019 highs: Dalian is soft: Big Iron strong despite broker downgrades: Big Gas is soaring with oil and cartel east especially strong on the news of Labor’s Beetaloo pipeline play:
Via Banking Day: While there have been plenty of lenders dropping fixed rates in recent months, few have cut their variable rates. That changed last week when ANZ, AMP Bank and Bendigo and Adelaide Bank bucked the trend. ANZ cut the discount on its Simplicity Plus principal and interest rate for new loans with loan
Every day it’s a steady drumbeat of dodgy. Via The Australian: The Morrison government is making a direct election pitch to mortgage brokers, telling them Labor will hit their industry and “accelerate the slowdown” in the housing market. The letter sent to mortgage brokers, and obtained by The Australian, was signed by Prime Minister Scott
Via Banking Day: Fact and exaggeration over the extent of branch closures and job cuts at Commonwealth Bank will be flushed out before the Fair Work Commission. The Finance Sector Union yesterday lodged a dispute with the FWC, which will drag CBA’s bank’s plans or lack of them into the public eye early next month.
Via The Guardian: The new Northern Australia Development Fund will provide $1bn to tourism projects and “up to $1.5bn” for a new gas pipeline to unlock gas in Queensland’s Galilee and Bowen basins and connect the Beetaloo basin to Darwin and the east coast. Labor said the policy would help Darwin export gas, while increasing
Via Mark the Ballot: Interestingly, the odds for the Coalition have improved slightly since the election was called. This morning they stand as follows. The odds charts follow. And the implied Coalition win probabilities are as follows. The individual seat markets provide a window on how punters think the election race is progressing. At the
Some good news for Australian sovereignty under Labor, via Domain: Labor was briefed on the government’s decision last year. Labor sources, speaking on the condition of anonymity to discuss sensitive policy matters, said the advice from security agencies’ is unequivocal and there was no appetite to review the ban. One source said the evidence that
It’s something to behold, via Bloomie: Tellurian Inc.’s proposed $28 billion Driftwood terminal in Louisiana and Sempra Energy’s Port Arthur LNG project in Texas were cleared by the Federal Energy Regulatory Commission in a 3-1 vote in Washington, with Democratic Commissioner Richard Glick dissenting. The approvals followed a breakthrough at the commission, which had been
Via The Australian: A surge in support for Clive Palmer on the back of a $30 million advertising campaign has given the billionaire the power to act as kingmaker in marginal seats, as the Coalition closes in on Labor in at least two of those electorates. An exclusive Newspoll of four marginal seats across the
Iron ore prices for April 22, 2019: Spot firm. 12 month futures sagged as supply is responding. Steel OK. Here’s the problem a year and more out, via Bloomie: Mining dealmaker Mick Davis has won permission to export iron-ore from a planned mine in West Africa, adding momentum to the industry veteran’s comeback. Davis, through
DXY was firm over Easter with EUR and CNY soft: AUD fell against DMs: And was mixed against EMs: Gold is fading: Oil is surging: And building nice little inflation shock within six months: Base metals were soft: Big miners too: And EM stocks: Plus junk: Treasuries were sold: Bunds bought: And stocks firm: Westpac
The AFR led with an embarrassing story across Easter that shows how low it has sunk in the intellectual stakes: By forgoing the possibility of creating a dynamic economy of the South Pacific, Shorten has rejected his own political heritage and embraced a higher-tax platform that delights the left of his party. A Shorten government
There’s one at Domain: The key economist cited in the election row on climate change has doused fears of a major blow to growth from deeper cuts to greenhouse gas emissions, saying the impact would be a “small fraction” of the economy by 2030. Australian National University Professor Warwick McKibbin said federal government policy to
Via Zero Hedge: Back to the Politburo statement which found that proactive fiscal policy should improve effectiveness and efficiency, “while prudent monetary policy should be appropriate in terms of looseness and tightness.” A notable change from the October, December and February meetings, is that there was no mention of the goal of maintaining “6 stabilizations” (on employment,
Via BI: As seen in the table below from employment website SEEK, job advertisements for property workers are now also falling fast. Seek has recorded the percentage change in advertisements on its platform in the year to March. The downturn in the housing market has had a major impact on demand for workers with ads
Via Westpac: • Westpac’s forecast for the March quarter CPI is 0.1%qtr with the annual pace easing back to 1.4%yr from 1.8%yr. • The March quarter is a seasonally soft quarter with the ABS projecting a seasonal factor of +0.2ppt. The seasonally adjusted CPI is forecast to rise 0.3%. • Core inflation is forecast to
Via the NAB quarterly business survey: Both business conditions and confidence declined in the quarter. Conditions continued its downward trend since peaking in early 2018 and is now only just above average, suggesting the loss of momentum in the business sector has continued into early 2019. Confidence and forward orders turned negative in the quarter
ABS Labor Force is out for March and the news is still pretty good: MARCH KEY POINTS TREND ESTIMATES Employment increased 20,700 to 12,790,000 persons. Full-time employment increased 18,000 to 8,781,800 persons and part-time employment increased 2,700 to 4,008,200 persons. Unemployment increased 3,000 to 675,700 persons. Unemployment rate remained steady at 5.0%. Participation rate remained
It certainly got overbought as we know, via Credit Suisse: And yields have been rising now for few weeks: The curve has also steepened a little: Though spreads to the US have not really compressed much at all: I still expect the Aussie economy to be dragged into the housing bust throughout H2 and the RBA
Via The Australian: Senator Storer said if an incoming Labor government dragged the Senate back before June 30 to ram through part of its policy platform before the composition of the upper house changes following the election, he would attempt to push the government to ban Treasury costings of opposition parties. “Treasury and all other
Via the FT: Bernie Sanders, the Vermont senator who fought Hillary Clinton for the Democratic nomination in 2016, led the field of 18 Democrats in the first quarter of the year by raising $18m, according to the Federal Election Commission. He was followed by Kamala Harris, the California senator, who raised $12m in the first
Another bank profit warning: UBS remains highly skeptical: …underlying trends are likely to remain very soft and deteriorating: (1) Volume growth should continue to slow as the credit squeeze continues and banks move to improve expense verification (reduced reliance on the HEM benchmark). (2) A bounce in NIM is expected following mortgage repricing. But how
Via the CBA Flash PMI: The Commonwealth Bank Flash Services Business Activity Index is designed to provide a timely indication of changes in business activity in the Australian service sector economy as a whole. Readings above 50.0 signal an improvement in business activity on the previous month, while readings below 50.0 show deterioration. Services business
Via Bloomie: Officials are drafting measures to bolster sales of cars and electronics, according to people familiar with the matter, who asked not to be named because they aren’t authorized to discuss the plan. That news coincided with data showing a 6.4 percent year-on-year expansion in the first quarter — beating economists’ estimates. China’s latest
The world’s most boring election continues. Via The Australian comes the cost carbon mitigation: Australian businesses could be forced to spend more than $25 billion on international carbon credits to meet Labor’s 45 per cent emissions reduction targets by 2030, jeopardising one of Bill Shorten’s fundamental election pillars, which he declared would have no cost to
Iron ore prices for April 17, 2019: Spot spanked on Brucutu. Paper more. Steel solid. Port stocks are climbing, 149mt last week, suggesting no shortage or ore. We might see some price strength as mills restock a little longer but the clear risk now is more price falls moving into May/June which is a
DXY was down last night with EUR and CNY up: AUD is still warm versus DMs: Mixed against EMs: Gold is struggling. I’m turning more favourable: Oil eased: Copper wants to chase Chinese stimulus: Big miners were soft as iron ore fell: Em stocks are grinding higher: Junk fell: Treasuries were bid: Bunds sold: Aussie
Via the excellent Damien Boey at Credit Suisse: We think that the RBA will cut rates, probably in 2H. For further discussion of this view, please see our recent article “Can you feel the tension at the RBA” dated 20 March 2019. But we also think that officials are thinking about monetary policy with reference
Via Bill Evans at Westpac: The minutes of the April monetary policy meeting of the Reserve Bank Board have provided the clearest signal yet that the Bank would be prepared to cut the cash rate. Firstly, the final section “Considerations for Monetary Policy” states “a lower level of interest rates could still be expected to
