Houses and Holes


Goldman: US jobs to miss

Goldman with the note: We estimate nonfarm payrolls rose 500k in August, below consensus of +725k. While the seasonal hurdle is relatively low in August, the monthly pace and cross-section of Big Data employment indicators are consistent with a sizeable drag from the Delta variant. On the positive side, we expect the reopening of schools


Paul Keating stokes Labor’s China problem

Former PM Keating today: The Morrison government is wantonly leading Australia into a strategic dead end by its needless provocations against China. …Save for its front porch, the South China Sea, it broadly keeps to itself. Is the Morrison Government a ham-fisted China basher? Yes. Does it have a plan for the divorce? No. Is


QUEENSLANDER stomps Morrison cockroach

Queenslander! Deputy Premier Steven Miles: “Yesterday Scott Morrison had six members of his team out attacking Queensland, our border restrictions and our Premier.” “We haven‘t seen a pile-on like that since before the state election last year.” “Not one of them mentioned the outbreak in Sydney — it’s as though Queenslanders are somehow responsible for


US growth crash begins

Morgan Stanley with the note: We are revising down 3Q GDP tracking to 2.9% from 6.5%, previously. Our forecast for 4Q GDP remains at 6.7%. The revision to 3Q implies full year 4Q/4Q GDP at 5.6% (5.7%Y) this year – 1.4pp lower than the Fed’s forecast of 7.0% in its June Summary of Economic Projections


CBA wrongly wrong on iron ore

The CBA has opted for the glass-half-full approach to steel and iron ore: “For iron ore prices to find meaningful support again, we would need to see policy on China’s steel output cuts relaxed,” he says. “That’s not as unlikely as it seems, especially if steel prices lift notably. We think that’s completely plausible given


Evergrande contagion sweeps Chinese developers

It’s on like Donkey Kong for Chinese developers. Evergrande is going out of business and other weak players are being sucked in: A worsening selloff in China Evergrande Group’s dollar bonds is once again spreading to other developers, raising the stakes for Chinese authorities as they mull whether to support billionaire Hui Ka Yan’s embattled


On vaccine efficacy and boosters

Goldman with the note: Outbreaks in economies that vaccinated early such as Israel and new studies have raised doubts about the durability of vaccine protection and prompted booster rollouts. How much has the efficacy of major Western vaccines waned over time and how much will boosters help? We first show that lower recent estimates of


Morrison Government commits COVID electoral suicide

Queenslander! Anastasia Palaszcuk was magnificent yesterday: We must do everything possible to keep Queenslanders safe from Delta, especially our children. #covid19 — Annastacia Palaszczuk (@AnnastaciaMP) September 1, 2021 Exactly. To wit: Almost a third of teens experience coronavirus symptoms three months after diagnosis, according to a U.K. study that suggests long Covid also afflicts


Daily iron ore price update (more output cuts)

The ferrous complex was smashed on September 1, 2021 as spot cratered, paper held and steel tumbled: News was all about more output cuts: Production restrictions in various regions have continued to advance, and there are signs of increasing efforts. Due to the strengthening of dual control of energy consumption, the Guangxi region has imposed


Evergrande hurtles into the abyss

It’s fun to watch. China’s Evergrande, the most indebted developer in the known universe, is hurtling into the abyss. Its deleveraging efforts have all been for nought: On the face of it, China Evergrande Group made progress cutting its debt load in the first half of the year. On closer examination, paying its dues got


Australian dollar surges on US jobs miss

Forex markets are settling into a comfort zone that excludes the Fed taper. DXY has confirmed a false breakout and EUR is up: The Australian dollar has given back all taper losses: However, the reason why taper is off, slowing growth, also weighed on commodities: And miners: EM stocks did better: But not junk: The


GDP saved by vaccine stockpiles

And yes, that’s how stupid the measure is. We’re all richer because nobody wanted the AZ vaccine. Westpac with the note: The Australian economy expanded by 0.7% in the June quarter, exceeding expectations. Annual growth lifted to 9.6% and activity is 1.6% above pre covid levels at the end of 2019. The key surprise –


US Delta wave peaking

BofA with the note: Recent Covid developments have been somewhat encouraging. Weekly case growth in the US has dropped to around 5%. Cases appear to be at or close to the peak in some states–most notably Florida–that were hit the earliest and the hardest by the Delta wave. Yet we think the situation is likely


American renters prepare for eviction

Goldman with the note: With the Supreme Court striking down the federal eviction moratorium and with most state-level restrictions set to expire over the next month, we explore how sharply evictions could rise under current policy, and we estimate the potential impact on the economy. Despite a severe recession, evictions actually declined during the coronacrisis


No respite in building China bust

Or should that be no respite in the bust in Chinese building? Evergrande is going out of business: China Evergrande Group warned that it risks defaulting on borrowings if its all-out effort to raise cash falls short, rattling bond investors in the world’s most indebted developer. “The group has risks of defaults on borrowings and


Consumer confidence still trashed

ANZ-Roy Morgan Aus Consumer Confidence rose 0.2% last week. Even as NSW daily cases hit the 000s, Sydney gained 0.9%, buoyed by good vaccination rates. Sentiment fell in Brisbane (-1.6%), Melbourne (-1.9%), Adelaide (-8.6%) and Perth (-0.8%). #ausecon @arindam_chky @DavidPlank12 — ANZ_Research (@ANZ_Research) August 30, 2021


Australia in recession pre-lockdowns?

It’s a close-run thing as Westpac tallies the partials: Q2 real net exports: Real net exports subtracted 1.0ppt from activity in the quarter, a larger than anticipated impact, market median -0.8ppts and Westpac -0.7ppts. Exports contracted, down by -3.2%, with resource shipments hampered by disruptions (maintenance and weather). Imports advanced, up by 1.5%, extending the strong