David Llewellyn-Smith


Swap lines a drop in the bucket for US dollars

Via Damien Boey at Credit Suisse: An un-natural vision of stability. The US trade deficit, a proxy for foreigners’ US dollar (USD) saving, is exhibiting remarkable stability of late. Ordinarily, stability tells us that there is nothing further to see – but sometimes, it can actually be a deceptive sign of instability. Consider that the national accounting identity says that


Golden oldies abandon Trump

Hoocoodanode that killing your base would…well…kill your base? Via the FT: The coronavirus pandemic is eroding Donald Trump’s popularity among a group that was crucial to his 2016 victory — older white Americans — a worrying sign for the president’s re-election hopes. According to a New York Times-Siena College poll released last week, two-fifths of


Aussie jobs recovery flatlines

Australia’s #labour market recovery appears to have stalled. Payroll #jobs increased by just 0.1% over the fortnight ending 13 June after averaging 0.9% growth over the previous three fortnights. #ausecon @cfbirch pic.twitter.com/Bbcbk9zv8T — ANZ_Research (@ANZ_Research) June 30, 2020 V-shaped recovery. Not. Here’s the problem, via the AFR: Virgin Australia could slash up to half of


RBA abandons inflation target

Deputy Governor of the Lunatic RBA, Guy Debelle, today: The Reserve Bank’s Policy Actions and Balance Sheet Australia is experiencing an historic event. It is first and foremost a health event. Thankfully, thus far the health outcomes in Australia have been better than feared. The health decisions taken by the government and the public in


Liveras outlines his manufacturing vision

He may not know what he’s up against but he’s persistent: Former Dow Chemical chief Andrew Liveris says the coronavirus crisis has created a generational opportunity to reset Australia’s industrial policy, get away from “developing reports” on the subject and recreate the country’s manufacturing base. …“What we have done is develop the sectors we should


New Zealand blocks international students for 2020

Very sensible. From Bloomie: New Zealand’s road to economic recovery is unlikely to include the return of foreign students this year, Finance Minister Grant Robertson said. While the nation’s successful elimination of community transmission of Covid-19 should make it an attractive destination for international students, it will take some time to establish the quarantine facilities


Let cafes burn

Harris Coffee has done a little survey at YouGov in some hope of getting barista bailout: 70% of Aussies are worried Australia’s cafés will never be the same again Almost five million Australians claim to have missed their local café more than pubs and clubs during COVID-19 Just under ten million Australians said they felt


Chinese PMIs remain weak

They’re positive but given they’re directional not positional they indicate a still-weak recovery. Manufacturing is barely expanding: From the perspective of enterprise scale, the PMI of large and medium-sized enterprises were 52.1% and 50.2% , up 0.5 and 1.4 percentage points from the previous month ; the PMI of small enterprises was 48.9% , down 1.9 percentage points from the previous month . From the perspective of the classification index, among the five classification indexes that constitute the


Australian spending recovery stalls

Via Shano today: CBA household credit & debit card spend suggests the gentle upswing in spending has paused and is now tracking broadly sideways when we smooth out the week to week volatility. Total spend is up 4.5% for the week ending 26 June compared to a year earlier. #ausbiz #ausecon #commsec pic.twitter.com/VNVv9aomGB — CommSec


US hurtles towards fiscal cliff

Via Bank of America: Fiscal: look out below In the face of the shock from the COVID-19 pandemic, fiscal stimulus has poured into the economy. Washington has pushed in roughly $2.8tr of stimulus, equaling 13% of GDP while the Fed has expanded its balance sheet to $7.1tr. The rapid and forceful support on the policy front likely


Consumer confidence tumbles on virus spike

Victoria’s COVID-19 spike has dented consumer confidence. Sentiment around ‘current economic conditions’ fell sharply, suggesting household concern about a return to tighter #lockdowns and the impact of a #secondwave on the economy. #ausecon #ausretail @cfbirch @roymorganonline pic.twitter.com/Z335yQ6MFO — ANZ_Research (@ANZ_Research) June 29, 2020


Don’t buy Aussie property now!

Unless you want to lose money. For investors, there is simply no reason to buy and plenty of reasons to sell. Even for first home buyers, there’s no reason to buy and plenty of reasons to rent. First, there is huge unemployment that is going to be very sticky with unprecedented wage pressures, via Credit


CCP: Australia has unleashed espionage assault in China

Lol, via CCP mouthpiece The Global Times comes Straya, the interfering superpower and evil kangroo: Australia is waging an intensifying espionage offensive against China – sending agents to China to spy, gather intelligence and recruit assets, instigating defection among Chinese nationals, spying on Chinese students and organizations in Australia, feeding fake news to media to


Brainless Biden sustains polling lead

Here is the problem: pic.twitter.com/hvyjRBiyCC — Donald J. Trump (@realDonaldTrump) June 27, 2020 Trump should be careful. It won’t be a good look losing to an empty head. Polls: Betting markets: Brainless Biden is still an unbackable favourite. And why not? Senility is no match for homicidal ineptitude: Brainless is as brainless does.


Stock shorts capitulate

Via ZeroHedge: After three months of relentless contrarian bearishness by institutional investors, even as retail investors first, and hedge funds subsequently (latest HF net leverage is 99%-ile) flooded into stocks, large institutions such as vanilla mutual funds and pensions finally capitulated to the Fed which is now openly pushing stock prices higher. In the CFTC’s latest


UQ pays for “violent” Chinese consul defense against Pavlou

Recall that: I can announce this morning that Queensland Police have launched an ongoing criminal investigation into Brisbane Chinese Consul-General Xu Jie’s efforts to incite and direct political violence against Australian citizens. A vindication for the rule of law. — Drew Pavlou 柏乐志 (@DrewPavlou) June 24, 2020 Chinese Consul-General Xu Jie directed violent attacks against


Melbourne virus explodes

Up she goes and where it stops nobody knows: Victoria is experiencing a “concerning” upward trend in coronavirus, with 75 new cases identified overnight. The total number of cases in Victoria since the pandemic began now stands at 2,099. “Obviously we are concerned by the increasing number and the upward trend and are monitoring the


Sick US consumer won’t save the world

Via the excellent Damien Boey at Credit Suisse: US consumption disappoints pre-“second-wave”. US consumption rose by a smaller-than-expected 8.1% in May, albeit with upward revisions to prior months’ data. More timely retail sales, chain store turnover and card spending data have been pointing to a stronger recovery, which has not manifested yet in the official data. The rise in consumption


Easing lockdowns does not boost economy with more virus

Pretty simple maths that eludes the lockdown fear mongers: This seems obvious to me but nevertheless here are two charts via Nomura which suggest that **easing social distancing measures doesn’t automatically equate to an economic boost if it comes with more COVID cases** pic.twitter.com/cF47xxmJad — Tracy Alloway (@tracyalloway) June 29, 2020 In short, the virus


So, when will ASIO raid Gladys Liu’s office?

Via News comes generally good news: A major investigation into an alleged espionage plot to infiltrate Australian politics is continuing, with ASIO raiding the home of a political staffer. Prime Minister Scott Morrison on Friday warned foreign powers, including China, that he “won’t cop” attempts to influence politics. “We won’t cop anyone coming and seeking


Australian dollar headed for 64 cents

DXY was up Friday night: The Australian dollar was down versus DMs: But up versus EMs: Gold flew but I’d be more comfortable if it pushed more decisively above its break out line: Oil was soft: Dirt was better: Miners fell: Junk looks vulnerable: EM stocks fell: Bonds were bidly: As stocks sank: The news


Buy Australian domestic demand stocks?

Via Bloomie: An Australian equities fund manager is wagering that stocks linked to the domestic economy will become the biggest winners as coronavirus measures ease. Firms tied to the country’s economic health should rebound quickly as restrictions unwind and consumption increases, said Jelena Stevanovic, portfolio manager at Platypus Asset Management Ltd. Australia is in a