Houses and Holes

2

The good, the bad and the ugly in Chinese data

Courtesy of Also Sprach Analyst China has reported the 3rd quarter GDP at 7.4% year on year. The slowest in years, but given the consistently disappointing data throughout the year, this has surprised nobody. The reality, of course, is that Chinese statistics are odd and sometimes unreliable, so unreliable that even the vice premier pointed this

64

Labor hits the front

This morning Nielsen reported a significant closing of the gap between the major Federal parties with Labour on 48 and the Coalition on 52 (TPP). This afternoon, Roy Morgan released a poll putting Labor in front (TPP): In mid October support for the ALP is 50.5% (up 2.5%) cf. L-NP 49.5% (down 2.5%) on a

7

Manufacturing still shrinking

NAB’s manufacturing quarterly is out and shows an ongoing decline: NAB’s Manufacturing Activity Index was stable in September quarter, at -0.7 points. This level implies further declines in manufacturing activity for the quarter – at around -0.9% qoq. • The stable Activity Index masks the diverging trends in the index components in Q3. A steep decline

94

MYEFO delivers happiness!

And as predicted, it’s a surplus with a smile. Even if that surplus is $400 million smaller than expected at $1.1 billion. Forward estimates have the surplus down from $7.5 billion to $6 billion in 2015-16. And now for the happy part: the assumptions. GDP is forecast to be 3% in 2012-13, which  is down

4

Macro Investor Volume 1, Number 17

As US earnings season continues, disappointing corporate profits are prompting questions of where the next leg of equity market appreciation will come from. With efficiency and productivity gains in America tapped-out in the near-term and with Europe and Japan showing little sign of a rebound any time soon, hope continues to emanate from China and

3

Time for Mid Year Economic Optimism (MYEFO)

Yes, it’s that time of year again – MYEFO (Mid Year Economic Optimism). And if it seems to have come around especially quickly this time around, that’s because it has! No prizes for guessing why. The longer the Government waits, the worse it will get. The current drop in our trade performance to a monthly

15

Daily iron ore price update

As you can see above from today’s iron ore complex price table, it was another lacklustre day’s trade on Friday. The ore chart now looks this way: Which we might describe as a loss of momentum. The steel chart is similar if marginally better: There’s clearly been an ore restocking impulse running through Chinese markets

1

Macro Investor this week

We’d like to think that there exists opportunities in all markets – and there does – but the (mis)behaviour of risk assets in recent weeks speaks of an increasingly irrational exuberance based on little more than the underwriting of a price floor by central banks. Yet even the money printers of the US Federal Reserve

37

Daily iron ore price update

Here’s your overnight ore complex action: Looks like the bulks got their Chinese data bounce one day early. In other news, I mentioned this yesterday but it’s worth repeating. Marius Kloppers has declared the end of the boom: In the 10 years or so that have passed since China first came to the fore as

10

Another ore expansion bites the dust

From The Australian: MOUNT Gibson Iron will lay off about 270 workers, slow mining and cut pay for senior managers to curb costs and help it ride out a fall in commodity prices. “The immediate market outlook remains uncertain,” chief executive Jim Beyer said today in a statement to the Australian Securities Exchange. “The only

10

Chinese growth stabilises

So, the China data dump has landed and it shows stabilising growth. Real GDP came in at YoY 7.4%, the  previous was 7.6%: Real GDP year to date was  7.7%, the  previous 7.8%. Of the components, industrial production came in at 9.2%, previous was 8.9% Year to date is 10%, previous was 10.1%: The all important fixed

22

Treasury confesses

From the AFR: Treasury’s top economic forecaster has conceded that commodity prices have fallen by more than the government expected in the May budget, reducing the expected pace of Australia’s resources investment boom. “There’s no question commodity prices have come down by more than we expected at budget,” executive director of Treasury’s macro-economic group (domestic),

0

NAB quarterly business survey still weak

The quarterly version of NAB’s business survey is out this morning and shows status quo weakness: Business conditions improved modestly in the September quarter though were unable to recover the sharp fall in the previous quarter. Official ABS data point to relatively soft activity in the September quarter, following a fairly robust first half of

18

Land sales recovering?

The HIA has released a new report this morning which offers a little more hope to the RBA’s new agenda of boosting dwelling construction. Land sales are showing a rising trend: The latest residential land update signals that new housing starts should begin to recover modestly by early 2013. “The June 2012 quarter saw residential

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The MRRT dog

The Minerals Resource Rent Tax is on the receiving end of a nasty report in The Australian today: BHP Billiton and Rio Tinto will be the only resource companies making payments of the new mining tax when the first instalment falls due on Monday, and they will be doing so out of a sense of

2

ANZ property insider survey falls on mining worries

Find below details of the ANZ’s December quarter property industry survey. The latest Property Council of Australia-ANZ Property Industry Confidence Survey revealed a weaker property industry outlook in the December quarter. Asofter global economy, weaker hard commodity prices and a high Australian dollar are producing challenging domestic economic conditions, particularly for the mining sector. Today’s data confirms

30

US growth set to rebound?

Courtesy of Sober Look. Deutsche Bank’s economists are turning bullish on the US output growth in 2013. They believe that improvements in US home construction (see discussion) will have a multiplier effect – even though construction by itself accounts for only 1% of the GDP. And they are seeing some of this multiplier effect in

10

Cast iron drivel

Business Spectator’s Ben Potter has a fast and loose take on iron ore today: Third quarter production reports have catapulted the big miners higher as they met or exceeded analyst expectations. This, combined with strong offshore leads and an investment community that is fast becoming less bearish on China provide a near perfect storm for

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New home market still the worst in 20 years

If Stockland’s warning this morning is anything to go by, the RBA has some work ahead of it if it wants to deliver on its plan to stimulate new dwelling construction: Stockland will update securityholders on its current performance and outlook at its Annual General Meeting in Sydney today. Stockland’s Residential business has continued to come

0

Bill Evans discounts his own Leading Index

And so he should. To put it bluntly, it doesn’t work. Today’s (August) rose above trend: Here’s why: The growth rate in the Leading Index has increased from –0.8% in March this year to 3.0% in August. The main contributors to that growth improvement are: manufacturing materials prices (1.3 ppt’s); overtime worked (1.1 ppt’s); productivity (1.1 ppt’s); corporate operating

36

The price of LNG export

There is another industry sponsored report out this morning. We are used to seeing these from the mining sector but today it is manufacturing that is getting into the act and more particularly chemicals. The report is called Large scale export of East Coast Australia natural gas: Unintended consequences. It is by Melbourne consultancy National Economics and was commissioned