It was a good time if not a long time. Nordea: Markets almost never cease to amaze. Just as we had written at ext pondering the doomsday spiral between commodity prices and inflation fears, the fixed income market got spooked enough so as to start triggering unwinds of various reflation trades. When the US10y yield
Via China’s NBS comes the February PMIs. These were weak but even more so when one considers that the great Chinese New Year people migration was effectively cancelled this year meaning more people remained at work. It may simply be that that distortion has not been picked up by the survey’s seasonal adjustments: In February ,
The RBA meets tomorrow amid some serious bond market and yield turbulence. This is new territory for the bank. It was only the last meeting that it “shocked” markets by extending its QE program. So, is it prepared to shock again?’ Via UBS: Higher bond yields now imply a very material RBA rate hike cycle
Iron ore prices for February 26, 2021 finished at decade highs: Indeed the entire ferrous complex is at new highs with steel and futures up again overnight and despite the global ructions in bond markets. Expect strong pricing to continue for two months. For a bit of fun, I have redone the very long terms
What next for bond and stock market crashes? Wall Street was mostly caught on the hop by the bond and stock crash so the wisdom of asking it at all is questionable. Let’s see what it has to say now. Goldman: This week’s move has put the velocity of the real yield selloff on par
Don’t say I didn’t warn you. Allegations of rape and cover-ups thereof within the Morrison Government and the Liberal Party continue to worsen. Now there are media indictments against a cabinet minister, at Domain: Accusations against a federal cabinet minister have been referred to police after two senators received an anonymous letter on Friday with
Good stuff from the AIG: Given the global industrial recovery and catch-up growth this is only a respectable rebound so far. Full report.
For the past couple of months, I have been warning of three things. The first is that this business cycle is not like any other. It is on amphetamines, speeded up, on fast forward if you prefer. In one year we’ve had a growth shock, stock crash, massive stimulus, stock crash up and tech bubble,
Sir Fomo McSpruikerson is an expatriate billionaire and proud proprietor of The Strayan, a vanity media project designed to boost his assets. Jacinda Ardern launches “Hugs for Houses” program amidst unaffordability crisis New Zealand Prime Minister Jacinda Ardern has launched a controversial new “Hugs for Housing” program, aimed at tackling the countries worsening house price
We noted this week that mortgage applications are now so hot that banks are unable to keep up and approval times are blowing out spectacularly. House prices are on the march too. FOMO is loosed and there is no prospect of higher interest rates for years. So freshly listed Liberty Financial is enjoying an unexpected
Via Goldman: Home prices are rising at their fastest pace since 2013 but shelter inflation is low and falling (see Exhibit 1). Should we expect higher home prices, significant fiscal support, and a quick economic recovery to also produce above-trend rent growth? Or has the coronacrisis led to a more persistent divergence as households abandon
Will the RBA target house prices? Sure it will. To push them higher. There is literally zero prospect of it doing anything else at this stage. And a negative probability of the Morrison Government following recent moves by New Zealand’s Ardern Government to force responsibility for house prices onto the RBNZ. The AFR is asking
Iron ore prices rallied yesterday and more particularly steel prices. Paper followed overnight: This appears to have been a delayed reaction to yesterday’s news of steel cuts in Tangshan which, as I noted, usually sends the ferrous complex higher. Any widening of steel mill margins is bullishh for iron ore. Good news is now good
More garbage from parliament today the Morrison Government sinks even deeper into the filth. The charade that the PM is above it all leads at The Australian: Scott Morrison has used official advice from the Australian Federal Police to set a new standard for his MPs, demanding they inform him of any criminal activity in
China’s trade war on itself via Australia has steadily worsened over the past year. It began with coal, shifted to barley, then moved quickly to lobsters and other rural products, followed by wine. A total of some $20bn in Australian exports to China annually. Yet none of these is a problem at the macro level.
What a business cycle this is. Juiced by virus amphetamines it is moving extraordinarily fast. Last year we had the crash down, the crash up, a depression, thumping stimulus and K-shaped recovery, a gold boom and bust on debasement, growth stock bubble and now bust plus value rotation, an alleged commodity super-cycle, and now, one
The Australian dollar has been rising very quickly in the past few weeks. This is as expected. My target is the low- to mid-80s. The drivers are obvious in very high terms of trade and a declining US dollar. How are these two playing out together? First, a Wall St take on the US Dollar
Goldman is pumping this one like there is no tomorrow: The rally in oil prices has paused after Brent prices briefly reached the $65/bbl summer forecast we first set-out last August, on the realization that frigid US weather will only marginally tighten the global market and over concerns for a return of Iranian barrels. Despite
Capex intentions are out from the ABS. These figures are estimates for the next eighteen months of business investment, direct input into GDP. They are better than some feared but still not well. Via ABS: Total capital expenditure Estimate 5 for 2020-21 is $121,428m. This is 4.8% higher than Estimate 4 for 2020-21. Estimate 1
BofA: In a normal business cycle recovery, the economy gradually returns to full employment, causing a lagged return of inflation pressure. This gives monetary and fiscal authorities’ time to recalibrate policy before there is serious overheating. This cycle looks far from normal: Super easy monetary and fiscal policy suggests the fastest business cycle recovery since
While global stock markets are still on the march, Chinese bourses have been bashed over the past week in Hong Kong and Shanghai. Given China is the leading indicator for this business cycle, first into and out of the virus, with accompanying stimulus, is this the harbinger for global markets? First up, the correction so
Mizuho: Despite January’s negative inflation rate, we still look for mildly positive inflation for 2021. In this note, we examine a few factors that are likely to impact China’s inflation throughout the year, including CPI’s base effect and revised weights, the pork cycle, consumer confidence, credit growth and the external environment. In detail, the base
Iron ore prices traded flat yesterday. Paper markets were soft overnight. Rebar did better: Yesterday CISA released mid-Feb output data for major mills and it hit preposterous levels: This is a part of the early year build of steel inventory and will come down before long. Even so, it is clearly bullish for now. Even
The filth deepens. Now our chief intelligence officer, Peter Dutton, knew nothing. Via Domain: A special investigations board at the Australian Federal Police discussed the alleged rape of Brittany Higgins on February 11 this year, triggering formal advice to Home Affairs Minister Peter Dutton about her case. The board, chaired by deputy commissioner Ian McCartney,
The RBA has been very explicit about why it has renovated its entire monetary policy framework. Its inflation goals have fallen short for a decade. One major reason why was monetary policy was too tight leading to an overly high Australian dollar. Yesterday at Bloomberg, Westpac’s Sean Callow declared: “The conversation around the Aussie changes
The post-pandemic environment is deeply irrational. We’ve seen markets crash down and crash up. Autocracies charge into self-defeating abuse of all and sundry. Democracies give up entirely upon accountability. Riots at the Capitol. The “great reset” conspiracy theory. The normalisation of rape in the Australian Parliament House. Entire countries swept by death while others bunker
BofA with the lastest charts: The latest update to University of Washington’s IHME Covid-19 model shows dramatic improvement in the trajectory for the US Covid-19 situation between now and the summer. They no longer predict another spike in daily infections due to the more infectious mutated variants, all that remains is a bump–i.e. a March
Via Credit Suisse, now aligned with Goldman uber-bulls: Raising S&P 500 Target to 4300 on Earnings Upside and Reopening Prospects We are raising our 2021 S&P 500 price target to 4300 from 4200, representing10.9% upside from current levels, and 14.5% for the year. This follows an increase from 4050 on January 7 (seeS&P 500 to
Late yesterday China released its 70-city house price index and it showed some refirming of prices for January with month-on-month prices at 0.3% and year-on-year at 3.9%: The number of cities registering gains swung back to positive with 40 versus 30 stable of falling: The price gains are still very much in lower-tier cities: There
US Treasury Secretary, Janet Yellen, weighed in on Bitcoin last night, clearly on the negative side. This is important: It is a highly speculative asset and you know I think people should be aware it can be extremely volatile and I do worry about potential losses that investors can suffer. I don’t think that Bitcoin
