Not much doubt about it now. Chinese new credit for March was out over the weekend and the credit tap is awwwn with total social financing at 2.86tr yuan and bank loans at 1.69tr: Shadow banking surged to 40% of finance and appears to be forming a bottom: M2 growth jumped to a one year
Iron ore prices for April 12, 2019: Spot was strong and at new highs. Paper is consolidating. Steel is firm. Chinese trade data for March saw a good rebound in steel exports to 6mt and change. Iron ore imports were at 86.4mt, up a little year on year and enough to slow the rolling annual
Via Newspoll this morning: Pauline Hanson’s support has nosedived, handing Scott Morrison the equal-best primary vote for the Coalition since just after the last election but also strengthening Labor’s lead. The first Newspoll since the May 18 election was called in the wake of the Coalition’s budget and Bill Shorten’s budget-in-reply speech puts the major
DXY was weak Friday night, CNY and EUR strong: AUD was wild against everything: Gold was muted despite DXY falls: Oil too: Metals firmed: Big miners were mixed. BHP/RIO strong: EM stocks were soft: US junk is flying: Weirdly, as Treasuries got belted: And bunds: Aussie bonds were worst of all: As stocks fly towards
Via Bloomie: Since last year, the government has doubled down on this kind of “targeted” stimulus, emphasizing the role of consumption and the promotion of a long-standing shift toward services and higher-value manufacturing — and away from expensive mega-projects. …Overall though, the relative restraint of the new stimulus strategy should help slow a build up
Via Lindsay David: Hilarious. In the US they measure LVR as cash deposit v property value of the individual asset. In Oz we use the Combined loan to value ratio measuring equity across an entire portfolio. RBA is really making big efforts to make things look nowhere near as bad as they are. pic.twitter.com/cLm57yzFZE —
The new RBA Financial Stability Review is out and brimming with anxiety: Risks to the household sector have increased over the past six months given weak housing market conditions. Housing prices have fallen significantly in Sydney and Melbourne after the earlier large run-up in prices, while in Perth and other miningexposed regions, prices have been
Via Stephen Long at the ABC: In terms of the careful language used by scientists and bureaucrats, the assessment was damning. Adani’s key water management plan for its coal mine in Queensland was so flawed its outcomes were unreliable, scientists from the CSIRO warned federal Environment Minister Melissa Price’s department. They were scathing about the
Via The Australian: Margin Call understands internal work on the project at the bank — which last year made a net profit of $9.23bn — has been underway for some time, with the closure of up to 300 of the bank’s national network of almost 1000 branches said to be under consideration. A reduction of
Via the AFR’s Patrick Commins: The RBA still has the potential to cut rates further, but by this stage that just looks like a case of indulging in “the hair of the dog that bit you”. I would argue a more effective and targeted way to support the housing market right now would be to
Via the excellent Damien Boey at Credit Suisse: In recent times, we have seen a number of central bankers attempt to jawbone the yield curve steeper, or at least, downplay the significance of flat-to-inverted curves. And all have failed: RBA Deputy Governor Debelle suggested that 10-year bond yields are artificially low relative to terminal rate
Goodness me, via the AFR: Scott Morrison has launched an early assault on Labor’s tax agenda by releasing Treasury modelling showing his opponents proposed increases and refusal to match the Coalition’s tax cuts would tally $387 billion during the next decade. The use of Treasury modelling, which the government had prepared before Mr Morrison called
Via The Australian: Commonwealth Bank boss Matt Comyn is believed to be working on a plan to cut more than 10,000 employees, about $2 billion of costs, at Australia’s biggest and most profitable bank. No wonder Comyn wants to keep the plan secret — at least until after the May 18 election. Margin Call has
After nine years of debunking their lies, it seems MB is going to have its work cut out over the next five weeks. Form the AFR: More evidence has emerged that the level of negative gearing for new property is already much higher than Labor assumed when predicting how much extra revenue it will collect
Iron ore prices for April 11, 2019: Spot up. Paper calm. Steel up. CISA late March steel output fell sharply and is only up a little year on year. I’ve added a second line (in black) to show what underlying demand is like ex-reforms that shifted illegal scrap production into blast furnaces over the past
DXY firmed last night as EUR eased: AUD flamed and fell all the way back: EMs were better too: Gold fell: And oil: Plus metals: Big miners were hit: EM stocks too: As US junk flies: Treasuries sold: And bunds: Aussie bonds are still hung up: Stocks were roughly flat: So, the AUD still can’t
This is nicely timed for Labor. From the OECD today: Governments need to do more to support middle-class households who are struggling to maintain their economic weight and lifestyles as their stagnating incomes fail to keep up with the rising costs of housing and education, according to a new OECD report. Under Pressure: The Squeezed
Via Morgan Stanley: With a lead of three quarters, this suggests that housing weakness is likely to persist through to the end of the year at least, with further downside to both approvals and prices. Credit supply is holding at very tight levels, with little relief expected post the completion of the Royal Commission. With
Vai Capital Economics: • Higher food and oil prices pushed up headline inflation last month but broader price pressures remained subdued and we don’t anticipate an imminent turnaround in underlying inflation. • Consumer prices rose 2.3% y/y in March, up from 1.5% y/y in February (the Bloomberg median was 2.3%, our forecast was 2.1%). (See
Via Shane Oliver: The Federal Election Some might be forgiven for thinking the wheels have fallen off Australian politics over the past decade with the same number of PM changes as Italy, a fractured Senate and “minority government” at times making sensible visionary long-term policy making hard. With the May 18 Federal Election offering a
Via the quarterly NAB property professionals survey: The trend decline in foreign buying activity over the course of 2018 has continued into 2019. In Q4, the market share of foreign buyers in Australian housing markets fell to just 4.9% (from 6.5% in Q4 and a survey high 16.8% in Q3 2014), and 3.5% in established markets
The AUD is a little soft this morning: The lunatic RBA has paralysed bonds for now: XJO is down moderately: Dalian is soft: And Big Iron: Big Gas is still enjoying its deluded political risk holiday: Big Gold is mixed: Big Banks are sick: Made that way by the croaking BOQ canary which has broken
Good stuff: The sooner this scourge is exterminated the healthier the economy will be.
From Scummo today: Our plan will build our economy, without increasing taxes, securing the future for all Australians. #BuildingOurEconomy pic.twitter.com/Ao8p6WPeDb — Scott Morrison (@ScottMorrisonMP) 10 April 2019 Let’s unpack what these five points really mean. Scummo Point 1: 1.25m jobs over five years The Truth: Jobs growth of 1.25 million over five years implies weak
More Coalition corruption today alas, via Domain: New emails have emerged that contradict a statement given by Liberal Party fundraising chief Andrew Burnes to the Australian Stock Exchange about a controversial meeting between his company, Helloworld, and his friend and major shareholder, the Australian ambassador to the United States, Joe Hockey. The emails show that
Via the AFR: The former corporate regulator Greg Medcraft has broken his silence on the Hayne royal commission, warning that using the courts against the banks could backfire given justice moves so slowl. He also described the recommendation to kill broker commissions as “absolute rubbish” because it overlooked the crucial role competition plays curbing misconduct.
Via The Australian: Analysts have sounded a warning over short-term earnings at thermal coal exporters after a slump in demand sent prices to the lowest levels in more than a year. The slump came as Australian politicians engaged in another round of brawling over approvals for Adani’s 28 million-tonne-a-year Carmichael thermal coal mine in Queensland,
Yuk: In short: lending down; NIM down; costs up; impairments up; profits down; dividend cut, and no relief in sight. This is not only a bank that needs to hike mortgage rates fast, it is a bank that needs rate cuts to absorb them just as fast. If this is a harbinger for broader banks
Iron ore prices for April 10, 2019: Dancing on a pinhead now. New has Vale in more trouble, via Reuters: Prosecutors are planning to file criminal charges against Brazil’s miner Vale SA and its employees over the collapse of a mine-waste dam in January that killed hundreds of people, the Wall Street Journal reported, citing the
Because what Australia needs is more deflation! DXY eased last night as EUR rose: AUD launched against DMs: But was mercifully weaker than EMs: Gold tacked on gains: Oil is parabolic: Metals are still soft: Miners too: EM stocks ground higher: US junk jumped: As Treasuries were bought: Bunds too: The lunatic RBA has killed
