David Llewellyn-Smith


Is Chinese urbanisation really the answer?

Cross-posted from Kate Mackenzie at FTAlphaville. Last week we ran a guest post from Yukon Huang of the Carnegie Foundation, which argued that China’s high rate of investment to GDP (which exceeds levels ever reached by obvious comparisons such as Japan and South Korea) is a consequence of China’s economic rise, not a problem in itself. The


DEEWR leading jobs index falls

From DEEWR this afternoon: DEEWR’s Monthly Leading Indicator of Employment (Indicator) has fallen in September 2013 for the eighth consecutive month. The previous estimate of a slight rise in the Indicator in July has been revised to be a slight fall. This now confirms that employment is likely to continue to grow more slowly than


Unemployment expectations fall sharply

Accompanying good consumer confidence numbers today, there is also a good result for unemployment expectations. From Westpac: The unemployment expectations index fell 6.6% in Aug, the largest monthly improvement (remembering that a fall in the index suggests consumers are not expecting unemployment to rise as much as they did a month earlier) since the 6.9%fall


Consumer Sentiment leaps

From Westpac today: This is a very strong result. It is the highest print for the Index since December 2010. If sustained, it indicates that the Reserve Bank’s series of rate cuts which began in November 2011 are finally gaining strong traction with households. The Index has now increased by a respectable 13.8% since the


US rate spike “slams” mortgages

From the WSJ: A rise in interest rates is slamming homeowners’ demand for mortgages, prompting large and midsize banks to cut jobs and warn investors of declining profitability in the home-loan business. Wells Fargo WFC +1.75% & Co., the nation’s largest mortgage company by loan value, on Monday told investors at a conference that it expects mortgage originations


Thermal coal points the way for the mining boom

From the SMH: Commodities giant Glencore Xstrata has promised to achieve $US2 billion worth of synergies across its newly merged, global portfolio, in a move that is set to prevent at least one new Australian coalmine from going ahead. The newly merged Swiss company unveiled the dramatically increased $US2 billion target during an investor day


Japan and Australia declare LNG war

From AAP: At an LNG producer-consumer conference in Tokyo on Tuesday, the world’s largest importer of the fuel, industry minister Toshimitsu Motegi complained about a so-called “Asian premium”. …”Increases in fuel procurement costs impose a heavy burden on the Japanese economy,” he added. …That is because the region’s contracts are often long-term and linked to


Chinese shadow banking rockets back

Michael Pettis once described the Chinese authorities’ wrestle with its debt-producing economic model as a pendulum in which panicked measures to slow credit are followed by panicked measures to speed it up again. That has surely never been more obvious than right now with yesterday’s Chinese data showing a resurgent shadow banking sector accompanying the


China grows in the same old way

Cross-posted from Kate Mackenzie at FTAlphaville. Chinese macro data have been on a good run recently. Today’s release of August industrial production was particularly strong, beating consensus forecasts by a relatively wide margin, although not in a way that bodes especially well for long-term growth sustainability. Here’s a summary of key data published today, courtesy of


Daily iron ore price update (Baltic wild)

Find below the iron ore price table for September 11, 2013: A pretty weak response to yesterday’s solid Chinese data, suggesting seasonal weakness holds sway. However, in news, the Baltic Dry capesize component continues to moonshot: The cost of shipping raw materials surged the most in more than four years as strengthening steel prices in


Roy Morgan Consumer Confidence flattens

Roy Morgan’s weekly consumer confidence number is out and shows virtually no improvement following the election result: The weekly Roy Morgan Consumer Confidence Rating has risen to 121.3 (up 0.4pts in a week since August 31/ September 1, 2013). The small rise in Consumer Confidence is driven by an increase in confidence about Australians’ personal


Chinese data dump offers slight beat

China’s August figures are out and show as expected a modestly accelerating economy with absolutely no evidence of rebalancing. Industrial Production was the best of the numbers at 10.4% well ahead of consensus at 9.9% and last moth’s 9.7%. Fixed asset investment came in at 20.3 versus 20.2 for consensus and 20.1 for last month.


Australian dollar breaking out?

As noted yesterday, the Australian dollar appeared poised for more convincing reversal than it has managed in recent months and today it continues to rise off its double bottom: 93 cents looks like resistance before any push higher. This afternoon’s China data might be a catalyst and certainly the media seems to think it’s going


Coalition too late the hero on competition

Recently MB readers were dragged down by a depressing speech from the incoming finance minister, Andrew Robb, in which he celebrated Australia’s oligopoly economy. Today we are reassured that a new inquiry will address the issue. From the AFR: The likely new federal small business minister, Bruce Billson, said “comprehensive” terms of reference for the


NAB Survey: Confidence rockets, jobs crash

From the NAB Survey today: Business confidence strengthened considerably in August, with the index rising to its highest level since May 2011. The cash rate cut in August and a lower AUD may have helped sentiment but it appears more important were political factors – including an expectation of political change and more certainty about


Manpower sees worsening jobs outlook

The quarterly Manpower Employment Outlook Survey is out today and it’s more dour news for the job market: Australian employers report modest hiring intentions for the October-December time frame. With 17% of employers expecting to increase staffing levels, 14% anticipating a decrease and 69% forecasting no change, the Net Employment Outlook stands at +3%. Employers report


A decade of deflation for mining?

Goldman Sachs has a neat note out today looking at mining costs and arguing that deflation is the new super cycle: Potential for a protracted reversal of cost inflation While currently there are signs of recovery in the GLI, we could still see global growth in demand for commodities undershoot capacity additions over the coming


“Growth man” Hockey looks to building boom

From Joe Hockey this morning via The Australian: INCOMING treasurer Joe Hockey is looking at innovative capital markets funding to fire up investment in construction and infrastructure and offset any negative effects on economic growth from spending cuts. In an interview with The Australian, Mr Hockey declared himself “a growth man” and said he didn’t


Labor to pull Shorten straw

One doesn’t like to pre-judge these things. And it has to be said that if the last few years of politics have proven nothing else it is that anyone can do anything and still come out on top. But the election of Bill Shorten to the Labor leadership is prima facie a poor way to


ASX300 signals the capex cliff

WilsonHTM’s Damien Klassen continues to produce market leading insights with a little post earnings season note that says it all about the challenge ahead for the Australian economy: Consensus 3 month revisions to capex forecasts for ASX 300 Industrials* Consensus 3 month revisions to EPS forecasts for ASX 300 Industrials* Source: Wilson HTM, Thomson Reuters 


Peak coal in China

Citibank has an impressive note out on the future of Chinese coal usage and the news for Australia is good and bad. Good because carbon emissions are going to fall. Bad because our coal exports face a lot more potential downside: For the last decade, one of the most unassailable assumptions in global energy markets


Chinese urbanisation must slow

Overnight, FTAlphaville published another in a series looking at China and the middle income trap. Here is an excerpt: Not many countries – namely Japan, South Korea, Taiwan and Singapore -were successful in the last 50 years in moving up from middle income group to advanced economies. Most of the other emerging countries either did


Chinese inflation contained

China’s annual consumer inflation rose 2.6 per cent in August,  in line with market expectations and little changed from the previous month’s 2.7 per cent rise. Producer prices fell 1.6 per cent last month from a year earlier, compared with a fall of 2.3 per cent in the previous month. I’m more impressed by the