Peter Costello covered himself in glory again this week: Former federal treasurer Peter Costello says Australia’s monetary policy has probably run its course and believes some changes to responsible lending laws would stimulate the economy. Mr Costello said there was “a lot of intervention” following the Hayne royal commission earlier this year, which may have
Via News: If you use ute sales as a marker of small business investment in Australia, you get the impression small business is terrified. Sales of light commercial vehicles collapsed in October 2019, down 11 per cent compared with October 2018. At the start of the 2019, sales were much the same as last year.
Trade war going swimmingly. Via the German Chamber of Commerce in China, things are not going well: One quarter of firms have given up on Chinese expansion: A range of reasons: With trade war issues at the top: Nasty impact from tarrifs: One quarter mulling relocation: Mostly to SE Asia: Chinese growth will keep slowing.
Via the FT: China’s fixed-asset investment growth has sunk to its lowest level in two decades as the Chinese leadership’s cautious stimulus fails to prop up the domestic economy in the face of a deepening slowdown. … The deepening economic slowdown, intensified by the US-China trade row, has ratcheted up pressure on Beijing to launch
Recessionberg is looking for tax cuts. Via Domain: The Morrison government is looking at ways to deliver tax relief to middle income earners as a much-needed boost to the economy after the nation suffered its biggest one-month fall in jobs in more than three years. Treasurer Josh Frydenberg said the government was “always looking” at
Wowsers, check this out from the AFR: Malcolm Turnbull was advised in a confidential memo in the aftermath of the 2016 election that the property boom was costing the Coalition support in the outer suburbs, regional cities and towns and the government needed to shift political strategy to avoid losing power. The analysis, by current
Texture from Reuters: Steel output was also curtailed by poor profits at mills. Besides surging iron ore prices that have pressured steel firms this year, analysts also noted that output from electric arc furnaces has been affected by higher scrap steel prices. “The price for steel scrap increased by almost 100 yuan ($14.30) per tonne
DXY eased last night as EUR firmed: The Australian dollar was put to the sword versus DMs: And EMs: Gold bounced: Oil fell: Metals were crushed: But miners did better as iron ore bounced on Pavlovian stimulus hopes: EM stocks were soft: Junk was fine: Bonds roared: Stocks were soft: There was not much in
So says the FT: Demonstrators and police officers are experiencing a kind of epiphany when they realise there are no repercussions for smashing the thin veneer of civility. As a consequence, the range of acceptable behaviour has widened dramatically and the most brazen and outrageous actions are becoming normalised. This is fed by social media
Via News, this does not read well for anybody: A group of 23 former fire and emergency chiefs tried repeatedly for several months to warn Scott Morrison and senior government ministers of a looming bushfire crisis. Had they been successful in their requests for a meeting, the group would’ve urged authorities to immediately lease aerial
Via Justin Smirk at Westpac:: The October Labour Force Survey surprised with a –19.0k decline in employment – the market median was for 16k while the lowest forecast in the range was +7k. It was a surprisingly soft update all the more so for while the participation rate eased back to 66.0% from 66.1%, as
Not me, that’s for sure. The ABC investigates: Claiming victory on election night six months ago, Scott Morrison said it was “the Quiet Australians who have won a great victory tonight”. “It has been those Australians who have worked hard every day, they have their dreams, they have their aspirations; to get a job, to
Amazing data again from China in October. All weak: Industrial Production 4.7% Fixed Assets Investment 5.2 % Retail Sales 7.2% All part of the relentless slowing: Under the bonnet, the all important real estate sector continues a near one man band super effort. Sales are still weak: So are developer land purchases though they have
Via the AFR: Under sweeping new rules, universities will have to fully disclose who they’re working with on research projects and all financial dealings with other countries and donors, as the federal government demands action against “corrupting” foreign interference. Amid concern about China’s influence in universities that have become heavily financially dependent on foreign students, research projects
Welcome to the future at the AFR: Sweden’s central bank said on Thursday (AEDT) it had sold off bonds from the oil-rich Canadian province of Alberta and parts of Australia because it felt that greenhouse gas emissions in both countries were too high. Riksbank Deputy Governor Martin Floden said the bank would no longer invest
More today from the BofAML fundie survey: 1. The bulls are back…global recession concerns vanish and “Fear of Missing Out” prompts wave of optimism and jump in exposure to equities & cyclicals. 2. We say…easy part of rally over, tougher part of rally beginning…but rally it can as no “excess greed” (BofAML Bull & Bear
Via the FT: A Chinese-backed joint venture has secured the rights to develop Simandou, one of the world’s biggest untapped deposits of steelmaking ingredient iron ore. The award to the SMB-Winning consortium, whose investors include Chinese aluminium producer Shandong Weiqiao and the Yantaï Port Group, brings the development of a mine a step closer. Simandou
The Australian dollar has been mashed by the falling jobs anvil: As bonds roar back: Stocks loved it: But not Big Iron: Nor Big Gas: Or Big Gold: Not even Big Zombie: Or Big Realty: There must be a few soaring bond proxies somewhere!
Via Damien Boey at Credit Suisse: The Westpac consumer confidence report for November registered more improvement. After 3 rate cuts, tax cuts, the announcement of first home-buying incentives, and credit easing, consumer confidence was looking particularly dire by October, falling well below neutral levels. It looked very much like consumers were responding to the bad
Via the ABS: OCTOBER KEY FIGURES Sep 19 Oct 19 Sep 19 to Oct 19 Oct 18 to Oct 19 Trend Employed people (‘000) 12,923.4 12,935.7 12.3 2.1% Unemployed people (‘000) 720.6 722.4 1.8 6.4% Unemployment rate (%) 5.3 5.3 0.0 pts 0.2 pts Underemployment rate (%) 8.5 8.5 0.0 pts 0.2 pts Participation rate
Via RBA sock puppet, Terry McCrann: Everyone seems to expect and many indeed lust for the Reserve Bank to embark on quantitative easing — printing money, but not for you but for the top end of town — except the only guys, non-gender specific, that matter. Those in the building at the top of Martin
If the definition of insanity is doing the same thing over and again and expecting a different result, then Aussie economists are bonkers, at Domain: BIS Oxford chief economist Sarah Hunter said the wage figures were dismal, adding they meant the RBA would have to take official interest rates down to 0.5 per cent next
Via Zero Hedge comes CTA wizard Charlie McElligott of Nomura: Nomura’s Charlie McElligott who echoed what we said on Saturday, writing that “the Treasury selloff feels “tactically tired,” with positioning now well-cleansed (massive duration sale from leveraged funds in the last reporting period, plus short-term CTA model now-having established their “short” TY and ED$ positions
SEEK jobs ads still falling: Bed pans forever!
Via FTAlphaville: In the summer of 2018, Alphaville observed that there seemed to be a paradoxical bull market in being bearish. Since the financial crisis and the ensuing rise to fame of the investors who called — and profited significantly from — it (Bass, Burry, Eisman, Paulson, Gross et al.) there have been almost constant calls for
Via Sinocism: Watching this week’s events in Hong Kong is heartbreaking. There is growing speculation that Beijing may be on the verge of sending in the PLA and/or the People’s Armed Police to attempt to restore order. I am skeptical that anything like that is imminent. There however seems to be no obvious pathway to
Texture via Reuters: Benchmark Dalian iron ore futures jumped in morning trade on Wednesday, extending gains for a second session, after China’s Premier Li Keqiang again vowed to ensure that key economic goals for this year are achieved. China should keep macro policies stable, improve the use of local government special bonds and strengthen support
DXY was strong again as EUR and CNY sank: The Australian dollar fell again against DMs: EMs were mostly weaker still: Gold bounced: And oil: Metals are signalling bad: As are miners: EM stocks rolled: Junk held on: All bonds were strongly bid: Stocks edged down: The day-to-day data was OK with US inflation still
Via UBS: We expect a recovery in 2020 but a much weaker one than consensus Things will get worse before they get better. Assuming any Phase One US-China deal is limited (no tariff roll-back), the existing tariffs should continue to work their way into the data and create an air-pocket in US growth in H1-20`
The BoAML fundie survey is out, via AFR: “The bulls are back,” said Michael Hartnett, chief investment strategist at the bank. “Investors are experiencing FOMO – the fear of missing out – which has prompted a wave of optimism and jump in exposure to equities and cyclicals.” The survey found that investors are adding risk:
