Houses and Holes


Household financial confidence bottoming?

The magic of rate cuts. Via Martin North: Digital Finance Analytics has released the latest in our series of the Household Financial Confidence Index to end of August 2019. The reading this month was just a little higher at 85.45 (85.43 last month), but still well below the 87.69 back in 2015, which was the


Aussie GDP lowest since GFC

The ABS is out with Q2 national accounts and it is weak but saved from total embarrassment: June key figures Seasonally adjusted, percentage change (a) Mar 18 to  Jun 18 Jun 18 to  Sep 18 Sep 18 to Dec 18 Dec 18 to  Mar 19 Mar 19 to  Jun 19 Jun 18 to  Jun 19


Is it a Coalition, or a real estate, media monopoly?

Via the Coalition’s apologist, The Australian: Nine Entertainment chief executive Hugh Marks hosted a $10,000-a-head Liberal Party fundraising event on the set of the network’s Today show, prompting an angry backlash from the company’s newspaper journalists. Australia’s biggest media union said journalists from The Sydney Morning Herald, The Age and The Australian Financial ­Review raised


Brexit chaos builds

Via the BBC: Conservative MP Phillip Lee has defected to the Liberal Democrats ahead of a showdown between Boris Johnson and Tory rebels over Brexit. Dr Lee, the MP for Bracknell, took his seat on the opposition benches as the PM addressed the Commons. His defection means Boris Johnson no longer has a working majority.


The oil domino falls in the US

Another domino falls in the end of cycle shock, via WSJ: Bankruptcies are rising in the U.S. oil patch as Wall Street’s disaffection with shale companies reverberates through the industry. Twenty-six U.S. oil-and-gas producers including Sanchez Energy Corp. and Halcón Resources Corp. have filed for bankruptcy this year, according to an August report by the law firm Haynes & Boone LLP.


Daily iron ore price update (flame out)

Texture from Reuters: China’s biggest steelmaking city of Tangshan will carry out output restrictions on industrial firms for September and early October, to further strengthen improvement of its air quality, state media reported on Tuesday. More than 30 steel mills in Tangshan have been asked to cut operations throughout the month. From Sept. 1 to


Bills Evans: RBA to cut next month

Via Bill Evans at Westpac: As expected, the Reserve Bank Board decided to leave the cash rate unchanged at 1.0% at today’s meeting. The all-important final paragraph is slightly changed from the previous August decision statement and the minutes of the August meeting (“The board will continue to monitor developments, including in the labour market,


Lunatic RBA holds

The RBA decision is out and it’s a hold as expected: At its meeting today, the Board decided to leave the cash rate unchanged at 1.00 per cent. The outlook for the global economy remains reasonable, although the risks are tilted to the downside. The trade and technology disputes are affecting international trade flows and investment as


Did mortgage stress just peak?

Via Martin North: For the first time since 2015 the overall level of mortgage stress did not rise significantly in August, according to the latest research from Digital Finance Analytics, based on our rolling 52,000 household survey. That said, the proportion of households whose cash flow is under pressure when servicing their mortgages remains elevated


UBS: Worst profit season since GFC

UBS is not happy: Reporting season was soft, with more misses than beats… Reporting season is now over. FY19 results were generally weak, with the beat-to-miss ratio at 0.8 (well below average). Guidance was also very soft, with the upgrade-to- downgrade ratio coming in at 0.6, the worst in five years. However, the typical stock’s


Last minute save for GDP

Via Damien Boey at Credit Suisse: We now have all the partials we can get to nowcast 2Q real GDP. And the tally has surprised us to the upside, even if it is short of current Consensus expectations The trade balance has been revised higher, such that net exports will contribute 0.6% to real GDP growth.


The unsettling parallels to WWII

Via Michael Every at RaboBank: As mentioned on Friday, welcome to both La Grande rentrée and weltschmerz: and combining the two, this week we are ‘back with a bang’. That seems appropriate given yesterday marked 80 years since the start of WW2, which one would have thought would have received far more media coverage than it did: instead, far


Wool price sheared by trade war

The latest trade war casualty for Australia’s terms of trade is wool, via AFR: The price of wool is falling steeply as China’s textile industry feels the fallout from the trade war with the United States, and European economies weaken. with industry leaders bracing for worse to come. Australian wool prices are back to 2016


Federal ICAC now!

Via the ABC: The alleged donation scheme engulfing the New South Wales Labor Party is unlikely to have been brought under the same scrutiny if similar allegations were to occur at the federal level, prominent barrister Geoffrey Watson has warned. The NSW Independent Commission Against Corruption (ICAC) began public hearings last week into whether some


Hong Kong “catastrophe” unfolds

Via Domain: Embattled Hong Kong leader Carrie Lam said she has caused “unforgivable havoc” by igniting the political crisis engulfing the city and would quit if she had a choice, according to an audio recording of remarks she made last week to a group of businesspeople. At the closed-door meeting, Lam told the group that


Online retail recession deepens

Retail sales for July is out today. NAB has released its online version and it’s not great: The NAB Online Retail Sales Index contracted (-2.0%) in July on a month-on-month, seasonally adjusted basis. This follows a contraction in June (-1.8% mom, s.a). In year-on-year terms, the NAB Online Retail Sales Index contracted (-1.1% y/y s.a.)


Shane Oliver: No new property boom

Via Investor Daily: AMP Capital chief economist Shane Oliver says the latest resurgence in property prices will be tempered by weak economic conditions and lending constraints. There are plenty of positive indicators to suggest property prices will soon be booming again. The boost from the election result which removed the threats to negative gearing and


Daily iron ore price update (dead cat screamer)

Bloomie has the trigger for the fun: China will maintain “reasonably ample” liquidity and “reasonable growth” in aggregate financing as it implements a prudent monetary policy, the State Council’s financial stability and development committee says at a conference chaired by Vice Premier Liu He. Various risks are “controllable” overall as the economy is stable and