David Llewellyn-Smith


Australian dollar choppiness continues

DXY was down again last night EUR rallied: The Australian dollar followed the script of firming: Though EMs were stronger: Gold is still shaking out weak hands: Oil caught a bid: Metals too: But not miners as iron ore deflates: EM stocks were up: Junk too: Despite US yields copping it: US stocks only go


UBS: Wages devastation spreads

It ain’t pretty. From the excellent UBS team: Wages similarly fell back by 0.6% in the two weeks to August 8, and worryingly slumped by 4.5% since the peak of the recovery on July 4. Since March 14, wages are now down by a cumulative 6.2%, which is significantly worse than payrolls, implying that average


Yield spike ahead?

From Barclays: In the US, the resumption in activity has been brought about by the falling number of COVID cases and increasing mobility which bodes well for the outlook. We maintain our recommendation of shorting 20y Treasuries as the improving backdrop argues for lower safe asset premium. With rising uncertainty about the Fed’s reaction function,


CBA to begin “encouraged” property sales

Via the AFR: Commonwealth Bank says its most over-leveraged borrowers – those whose prospects for returning to work after the coronavirus look the bleakest – could be encouraged to downsize the family home or sell multiple investment properties. Angus Sullivan, head of CBA’s retail bank, reassured all struggling borrowers that it won’t move too quickly


US virus cases falling, or just tests?

There have been state shutdowns of various degree to stop the second wave: But there is also this: The peaks coincide. I can’t find material suggesting this is the result of the supply of tests being limited, despite President Trump declaring he wanted just that at his Tulsa rally. Perhaps Republicans took him at his


Non-virus states power payrolls

Via the ABS: Between the week ending 14 March 2020 (the week Australia recorded its 100th confirmed COVID-19 case) and the week ending 8 August 2020: Payroll jobs decreased by 4.9% Total wages decreased by 6.2% Graph 1: Changes in payroll jobs and total wages indexed to the week ending 14 March 2020 (a) High level


Unis plunged into second China corruption inquiry

Via The Australian: Australia’s spy agency has warned universities about the risk to ­national security from Chinese government recruitment programs, including the Thousand Talents Plan, and has alerted them as recently as May to the ­potential for collaboration to turn into espionage. ASIO gave private briefings to universities urging them to strengthen their disclosure ­regimes


Oliver: Stocks no worries

Via Shane Oliver: Share markets have had a spectacular rebound from their March lows. The rebound has been led by the US share market which is up 52% and has just risen above its February record high, making it the fastest ever recovery after a 30% or more fall. Other share markets have lagged but


How Australia could break into civil war

Via the FMG true believers: Sitting atop a cash machine disguised as Australia’s third-largest iron ore miner, Fortescue Metals Group chief executive Elizabeth Gaines was justifiably emphatic about the importance of Australia’s increasingly testy trade relationship with China. “We can’t lose sight that we are a trading nation,” she implored, adding that the miner “didn’t


COVID mortgages spear into the turf

And stays there. CoreLogic weekly leading indicators:   Freefall, splat and lying there unconscious when we should be ramping into Spring. Remember that this is only owner-occupiers. Specufestors are still falling. Listings are very weak and may provide some price support. But wait for the forbearance roll-off: Still not much to recommend the market. Full


Aussie stocks catch the Nasdaq bubble

Via UBS: More beats than misses, guidance and earnings revisions less negative 110 ASX 200 stocks have reported, while 63 ASX 100 stocks have reported (out of 86 due to report). Price reactions to results have been largely positive, with EPS beats being rewarded, but EPS misses not being punished (Figure7). More stocks have beat


What will Jackson Hole bring?

The annual Jackson Hole central banking swingers party is later this week. Via FT: Several Fed officials have already expressed a willingness to allow inflation to run above the central bank’s 2 per cent target to make up for prolonged periods of undershooting. In Europe, investors will be looking for any clues about the likely next


Medicos pick through Morrison vaccine wreckage

Via Domain comes the self-evident: Doctors are urging governments not to compel Australians to get a COVID-19 vaccine, warning the fast-tracked approval process could create a risk of harmful side effects. Australian Medical Association President Omar Khorshid said while the peak body was “very supportive of vaccination generally because of its extensive science behind the


Game of Mates comes-a-cropper at AMP

Lol. Things must be bad for the Game of Mates to come so a-cropper at AMP: More at AFR: David Murray, John Fraser and Boe Pahari have all resigned from their positions at AMP following The Australian Financial Review’s investigation into the wealth manager’s culture that revealed sexual harassment complaints against top executives. I never understood why


Lunatic RBA property bubble autocrats spew at ABC expose

Amusing stuff, via the ABC: Top brass at Australia’s central bank have hit back at ABC reporting that exposed how the dire view of the housing market held by some Reserve Bank staff clashed with the rosy picture the bank’s representatives presented in public. Staff then sought “receptive” journalists to tell their side of the


Australia must prepare for the collapse of China trade

A nice piece from Paul Kelly on the weekend: China’s targeting of Australia’s highly successful $1.1bn wine export market, the latest threat in its campaign of trade retaliation, is a small cog in the larger global revolution where the US and China are decoupling in trade and technology — the lurch into a potentially demoralising