Via the ABC: Treasurer Josh Frydenberg has revealed an “implementation road map” around the 54 recommendations from the financial services royal commission that called for Government action. The final report from commissioner Kenneth Hayne made 76 recommendations, 54 of which were directed at the Government, which has been accused of dragging its feet in response to the
Via Morgan Stanley today As regular readers know, Morgan Stanley is pretty bearish on global risk assets. This applies to emerging markets (EM) too, where we’ve been calling for wider credit spreads, weaker EM currencies, particularly in Asia, and lower equity prices. However, not so long ago the narrative guiding investors ran something like this: The
From its quarterly update this morning: Still low but on the march upwards. It should keep getting worse with the economy. It’s the same story as other banks, entering zombie status as rising provisions meets low credit growth.
Texture from Reuters: Brazil’s Vale SA, the world’s largest iron ore exporter, said it had to temporarily halt operations at the Viga concentration plant that is part of its newly-acquired Ferrous Resources do Brasil due to a permit problem, impacting some 330,000 tonnes of iron ore production a month. But it said the suspension would
No QE says monetary curmudgeon Stephen Grenville: QE1 was a powerful instrument in rescuing key financial markets which had frozen, but this experience has no relevance for Australia in the foreseeable future. When the current monetary system was put in place in Australia in the 1980s, ‘free markets’ were the lodestone of policy. The RBA
Via the AFR over the weekend: The Australian Prudential Regulation Authority is looking for a new head of policy and advice, following the resignation this week of Pat Brennan, who had responsibility for developing the regulator’s policies on banks, insurers and super funds. Mr Brennan’s surprise resignation after more than eight years at APRA creates
I was short and dirty, via The Australian: The Coalition’s commanding electoral lead over Labor has slipped, in a sign the post-election honeymoon for the government has ended amid growing concerns over the economy and a clash over climate change. An exclusive Newspoll conducted for The Australian shows the Coalition has lost its post-election gains
What is a democracy to do with a protest movement against itself? The Fake Left Saturday Paper sums up the problem: In Clive Hamilton’s view, these are serious matters. “Events like these give pause to the public that is not formerly focused on the issue of CCP influence to say, ‘What the hell is going on?’ ” says
DXY was up Friday night and looks close to break out. EUR and CNY fell: The Australian dollar lifted anyway on the risk rebound: It was stronger than EMs too: CFTC positioning became is now extended bearish at -61k contracts: Gold eased: Oil was stable: Metals soft: Miners too: EM stocks firmed: And junk: Treasuries
It may be low volume but it’s not low intensity:
Via the excellent Damien Boey at Credit Suisse: Overnight, bonds rallied strongly again, partly because of investor nervousness about geo-political risks and slowing growth. Within the stock market, bond proxies and quality exposures outperformed again, while value stocks underperformed. Yet interestingly, we are actually seeing the forward-looking economic data improve: Both the New York and
Via Michael Pettis: On July 31, 2019, U.S. Senators Tammy Baldwin and Josh Hawley submitted a bill “to establish a national goal and mechanism to achieve a trade-balancing exchange rate for the United States dollar, to impose a market access charge on certain purchases of United States assets, and for other purposes.” According to an earlier memo that further
Via Domain: Treasurer Josh Frydenberg has vowed the government will take “the necessary actions” to protect the Australian economy amid fresh signs of a global slowdown and fears the United States could be on the cusp of a recession. In an intervention designed to calm nerves after $60 billion was wiped from the value of
Via the ABC: A pro-China rally planned for Saturday in Melbourne to condemn the clashes in Hong Kong has been postponed after a letter claiming to be an event permit from the Melbourne City Council was confirmed to be fake. A well-known local Chinese media outlet, Australian Red Scarf, first announced the pro-Beijing protests in
Terry Mccrann goes there today: …all economies around the world are struggling. Germany, the core of Europe, went backwards in its latest quarter; China has slowed to at best half the growth pace of recent years. And it might be worse: The China miracle might be over. The US is either just OK or teetering.
Via Martin North: ANZ today provided an update on credit quality, capital and Australian housing mortgage flows as part of the scheduled release of its Pillar 3 disclosure statement for quarter ending 30 June 2019 and associated chart pack. Given the strategy was to shed a portfolio of businesses and focus on the Australian retail market, we
The first early warning beacon for an economic cycle that is in trouble is advertising budgets getting pulled. They are very discretionary. To wit, Ooh: Domain tried to put lippy on the same pig: Warm bodies do not a listing make.
From Jude Blanchette at the Center for Strategic and International Studies (CSIS) at the AFR: Some argue that Beijing will ultimately refrain from the use of violence due to a concern over its global reputation or domestic blowback. Kerry Brown of King’s College London predicted: “Anything too dramatic is going to be quite a high
Aussie long bonds are insane. At all time low yields again today: The curve is now inverted all the way out past the 15 year: The last time this happened was the depths of the European debt crisis. Yet US yields are crashing even faster and spreads appear to have bottomed: That’s partially thanks the
There is one reason to think so today, via AFR: Westpac Group is set to follow up its landmark victory against ASIC on responsible lending with sweeping changes to home lending policies that include more rigorous assessment, deep diving into household spending, and new debt-to-income analysis of higher-risk loans. The bank is also planning to
Yesterday’s good jobs number had me wondering again just how big is the National Disability Insurance Scheme (NDIS) and associated spending. There is still a mystery in national accounts data over why GDP is so poor but jobs growth still solid and one answer may be welfare spending. There is a boom underway from a
Texture from Reuters: Shanghai steel futures managed to push higher on Wednesday despite unexpectedly weak Chinese economic data for July, including a marked slowdown in industrial output growth amid a protracted U.S.-Sino trade war. “Investors took a glass half full approach to the weak economic data in China, with expectations of extra stimulus measures rising,”
DXY was strong last night as EUR and CNY wilted: The Australian dollar hung on versus DMs: EMs were stronger: Gold is still bid: Oil is weak: Metals too: And miners: EMs stocks are at the cliff: Junk lifted a little: Treasuries were wildly bid: And bunds: And Aussie long bonds: Stocks were flat: Westpac
Via Damien Boey at Credit Suisse: Employment continues to defy the gravity of almost every leading indicator. Growth continues to track well ahead of our proprietary labour market indicator, which is based on ANZ job advertisements, NAB hiring intentions and our domestic demand tracker. Perhaps RBA Assistant Governor Debelle had it right today, when he
It started with Wall St but it got much worse after the good jobs report: Aussie long bonds are at more all time records despite the jobs report: Yet the Australian dollar rose 20 pips: Dalian is soft again: Big Iron is getting a taste of what’s to come: If anything, Big Gas is worse:
China is out with its 70-city new house prices measure for July at 0.6 month and month a 9.7% year on year: Top tiers are still struggling but below that is strong: And strength remains quite broad based: Here they are: Stable gains.
Via the excellent Damien Boey at Credit Suisse: Overnight, markets were spooked by deteriorating economic data and broad-based inversion of yield curves among the developed markets. The risk-off phase started with weak Chinese data, and was reinforced by weak European data. In 2Q: German real GDP shrunk by 0.1%, the second quarterly contraction within the
It’s easy, at FTAlphaville: For the past decade, China has driven global demand. While the West fretted over fiscal deficits and, in turn, outsourced economic policy to its central banks, the People’s Republic has repeatedly turned on the fiscal taps, fueling a bull market in commodities, consumer goods and overpriced perishables. As any fashion aficionado will
Via S&P: Australian prime home-loan arrears remained steady in June, with the Standard & Poor’s Performance Index (SPIN) for Australian prime mortgages slipping 1 basis point to 1.51% from a month earlier. That’s according to S&P Global Ratings’ “RMBS Arrears Statistics: Australia,” published today. Arrears typically decline in June and throughout the third quarter. Mortgage
Via the ABS just now: TREND ESTIMATES Employment increased 24,600 to 12,915,200 persons. Full-time employment increased 15,100 to 8,849,500 persons and part-time employment increased 9,600 to 4,065,700 persons. Unemployment increased 6,600 to 715,600 persons. Unemployment rate increased by less than 0.1 pts to 5.3%. Participation rate increased 0.1 pts to 66.1%. Monthly hours worked in
