DXY was steady last night: The Australian dollar is in free fall versus all major developed economy currencies: And emerging market currencies to boot: Gold was stable: Oil is very weak given the Iran situation and Saudi jawboning: Metals were mixed: Miners were hit: EM stocks hung on: High yield too: The Treasury curve flattened:
More steaming rubbish from Gottiboff today: I have a warning for Scott Morrison and Josh Frydenberg——many oldies don’t like what you are doing. It all starts with the Reserve Bank, which believes that if it lowers interest rates it will lower unemployment. Ranking second and third are retail and construction. There is no doubt that
Nothing makes my blood boil more than “tiny homes”. Whether it is the buyers or sellers of the sardine cans, acceptance of their existence represents a gigantic failure of the Australian political economy. Those Millennials that Domain so loves to quote as they gasp out a few words from diaphragms crushed between kitchen cabinet and bed,
Bitcoin is back: I won’t even pretend that this is sustainable. Nothing has changed for crypto in my book. It is as worthless and useless as ever. With the same inbuilt contradiction: that if it succeeds it can only fail, given it’s only purpose is subvert a fiat currency system that it does not control.
More bond rocket records tumbled Friday night as Aussie yields hit record lows across the curve: There is still little in the way of curve steepening: Spreads to the US widened: With the ten year now just 37bps above my 1% target, taking more profits is no bad idea!
At the AFR: Finding jobs for Harriet Blomfield, 18, has been easy. But she would prefer to not have to work four different gigs. The Australian Bureau of Statistics estimates that as at March 2019, around 979,583 people had secondary jobs. This is up from 853,248 in March 2017, 852,311 in March 2015, and 782,756
Via The Saturday Paper: The federal government is considering further measures to ease the financial burden on pensioners and new moves to force domestic gas prices down, in a deal to secure enough senate support to legislate its proposed tax cuts in their entirety. South Australian senator Rex Patrick and his Centre Alliance colleague Stirling
Via Nouriel Roubini: Across the advanced economies, monetary and fiscal policymakers lack the tools needed to respond to another major downturn and financial crisis. Worse, while the world no longer needs to worry about a hawkish US Federal Reserve strangling growth, it now has an even bigger problem on its hands. Last summer, my colleague Brunello
Ross Gittins wants to see Keynesian stimulus: … any fiscal stimulus is very short run, so as to support the economy before monetary stimulus fully kicks in, thereby minimising the harm done. Remind you of anything? The package of budgetary measures – the cash splashes and shovel-ready capital works – designed mainly by Treasury’s Dr
Spot eased. Paper was bashed Friday night. Steel is going nowhere, a standing warning for the bubble. The charts for June 14, 2019: Reuters has more: China’s Dalian Commodity Exchange said on Friday that it would raise trading limits and margins for the iron ore futures contract for September delivery , effective from June 18.
Last week I finally got around to watching Pine Gap, the ABC’s excellent geopolitical drama series. It is a terrific primer on the facility, as well as Australia’s position in the melting down relationship between the US and China. But it is also a terrible failure. After six episodes (spoiler alert), it culminates in a
The DXY bull returned Friday night as CNY and EUR sank: The Australian dollar is breaking down to multi-year lows against all three major developed currencies: It even sank versus EMs: Markets are still very short Aussie at -63k contracts: Gold tried and failed to break out as DXY rallied: Oil firmed on Iran tensions:
Chinese growth numbers for May were out over the weekend and, boy, is the Communist Party flogging a dead horse. Retail sales rebounded to 8.6% but fixed asset investment fell to 5.6% and industrial production hit a record low 5%: But it is under the bonnet where things really start to unravel. Fixed asset investment
Via Shane Oliver at AMP: Introduction While some have expressed surprise at the recent resilience in the value of the Australian dollar around the $US0.69-0.70 level despite weak Australian growth and Reserve Bank rate cuts, from a big picture sense it has already fallen a long way. It’s down 37% from a multi-decade high of
Welcome to your new economic model at SmartCompany: A whopping 725 workers have been back-paid more than $330,000 after a series of Fair Work Ombudsman (FWO) raids identified worrying levels of wage theft in regional Victoria and NSW. Less than three weeks after recovering $580,000 in stolen wages from regional businesses across Australia’s eastern seaboard,
Via the excellent Jonathon Mott at UBS: We estimate the RBA rate cuts and APRA’s removal of its interest rate serviceability floor may improve maximum borrowing capacity by around 14%. However, these changes need to be considered in the context of ongoing tightening, in particular a new HEM methodology, the rollout of Comprehensive Credit Reporting
It should read banks and AFR at war with RBA, via Chris Joye: With only two or three rate cuts left in the Reserve Bank of Australia’s kitbag, and a best-case scenario involving banks passing on half these changes to borrowers, debate is intensifying around whether the central bank will embrace quantitative easing (QE) more
Recall this from Gottiboff two weeks ago: In the wake of the surprise May 18 election result Australia is experiencing one of the biggest sudden stimulations in its peacetime history. The Chinese realise Australia’s outlook has changed and have created a surge of buying that has skyrocketed Sydney apartment prices by 10 per cent in
Via NAB’s Alan Oster: • We have changed our view on the cash rate, to include an extra cut in late 2019 – while heavily data dependent we have tentatively placed the cut in November. We also think that lower interest rates will be supported by fiscal stimulus later this year. We would not rule
What a pack of treasonous arseholes Labor are. Via The Australian: Victorian Premier Daniel Andrews says he is “very proud” to have signed his state up to Chinese President Xi Jinping’s controversial Belt and Road Initiative on trade and investment, despite his West Australian Labor counterpart, Mark McGowan, this week rejecting China’s push for his state
From some dill at Domain: Gold has just had its longest winning streak in 18 months, as investors get nervous about the impact of the Trump trade wars on economic growth, and the US Federal Reserve looks likely to cut rates. Once again, excitement surrounding the “quasi-currency” metal is building – and the gold bugs
Via UBS: Taking stock post-election – Has retail rebounded? No, we don’t believe it has. There is growing evidence that it has remained subdued / steady, albeit we note it is very early: i) Listed retailer updates and our channel checks suggest no change, with housing categories still softer (Figure 2); ii) Footfall has seen
Via Bill Evans at Westpac: Over the last two weeks, I have been visiting institutional investors, real money managers, and hedge funds in Europe and London. There has been extraordinary interest in the Australian story on this visit. Westpac has received considerable credit for its views over the last eighteen months. A year ago, when
Via Cameron Kusher at CoreLogic: In the lead-up to the recent Federal election the Coalition announced the First Home Loan Deposit Scheme. The scheme will provide up to 10,000 loans to first home buyers each year and will offer first home buyers better access to finance without having to save a 20% deposit. Additional details
There’s no downside to being a permabull when it comes to bonds. Albert Edwards from ScoGen is he: A key part of the Ice Age has been the prediction that US and European 10y government bond yields would fall to levels never previously seen – replicating Japan’s experience. We were told that this would never
McGrathmaggedon not sounding too hot on housing bounce either: But McGrathmageddon himself was so bullish only two months ago: Firstly, I pointed out that in Sydney (and Melbourne), the 5–10% drop we’ve seen so far followed a growth cycle that added 60–100% to property values overall. Many Australians owned property for the entire duration of
The new debt impulse in China continued in May with total social financing at 1.4tr yuan and banks at 1.18tr: Shadow credit remains muted: New loans have accelerated sharply through the first five months of 2019: However, they are somewhat flattered by the base effect given last year’s deleveraging hit particularly hard mid-year. Thus, M2
Good on Barnaby Joyce for debating the implications of Hong Kong for Australia at Domain: In its entire post-First Fleet history, Australia has not had to contend with the larger intercontinental political issues in isolation from its cultural and philosophical alliances. We’ve always had a larger, stronger partner. In the future we may have our
Via The Australian: Finance Minister Mathias Cormann has ruled out doing deals with crossbench senators to win their support for the Coalition’s $158 billion personal income tax cuts, intensifying pressure on Labor to back the plan. The blanket refusal by the government’s Senate leader to negotiate special deals or buckle to demands from Pauline Hanson
Spot took off. Dalian paper went even more nuts overnight. Singapore is more sober. Steel is not following which is a tell that this will not last long. Iron ore prices for June 13, 2019: So, how long? Ask Vale, via BNAmericas: Brazilian mining giant Vale expects part of its iron ore production halted by court
