Australian dollar

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A universally stinky Australian dollar (updated)

Alan Kohler may have joined the elite cheer squad of Australian dollar strength this morning but its all looking in vain at the moment. The Australian dollar looks weak and weakening to me. Today there’s no surprise about why with China’s property bubble going mainstream and the weekend’s property curbs whacking rebar futures big, as well

8

US budget sequester pressures Australian dollar

From AAP: President Barack Obama has accused Republican rivals of threatening the fragile US economic recovery by failing to move forward on his deficit reduction plan before severe budget cuts kick in. Mr Obama said that by refusing to allow a vote on a Senate bill that includes a balance of tax revenue and targeted

14

Australian dollar too hard for the RBA

Cross-posted from FTAlphaville. Strong currencies are the bane of every triple-A rated, QE-less economy in currency war-torn 2013, it seems. It’s become an increasingly irksome point in Australia, where the initial exuberance over cheap foreign holidays has been slowly replaced by worries that it’s squeezing the non-mining sectors. An FOI request by Bloomberg yielded a bunch of documents from

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RBA: Australian dollar 4-15% overvalued

The RBA has released a goldmine of analysis on how overvalued is the Australian dollar following a freedom on information request (God knows why this is not on the public record anyway. The market response was obvious though brief, above). The bottom line is that RBA reckons: Most models – including the staff’s internal models

45

Gillard joins the Australian dollar boosters

From BS, Julia Gillard joins the cavalcade of officials seeking to boost the Australian dollar: “We can still be a country that manufactures things. But we’re going to have to do it differently…The dollar is likely to stay high for some period of time.” …”The competitive disadvantage of the high Aussie dollar is obvious but

5

Macro Morning: Australian dollar safe haven’t

The uncertainty caused by the Italian elections continued to reverberate around markets overnight with European stocks under pressure and the US dollar and gold benefiting materially from the malaise. The election result seems to have come as somewhat of a surprise to the established players and clearly also the markets. Stocks in Milan fell 4.9%

5

Macro Morning: Risk aaaaaaawf

In 2010, 2011 and 2012 the problems of Europe hit the markets in late April and early May. I have been expecting something similar again this year given that the euphoria of the near death experience Europe is starting to give way to a recognition that the Eurozone economy is in dire straits still. The

2

Macro Morning: Itaaaallllyyyyyyyy

Nothing really matters this week except for the outcome of the Italian Elections which will start to filter out in Asian time today and then Bernanke’s walk up the Hill to give his testimony to the US Congress. On the former it is in the hands of the Italian people what happens but regarding the

24

Cap’t Glenn: Rates targeted the Australian dollar

RBA boss Glenn Stevens is in Parliament today for his annual testimony. Find below his opening statement which is noteworthy for its glass-half-full approach to the mining growth hand-off and his confession that interest rates have targeted the dollar in some measure. Sadly, markets interpreted the balance of these two arguments as bullish and added the better

16

Macro Morning: Fed caps stocks

It was a big night for currencies and commodities but there is a real risk now for stock bulls that the FOMC just put a lid on the recent rally. The FOMC Minutes which came out at 1700 GMT or around 6am Sydney time and showed a recognition that the flow of easy money can

0

Macro Morning: German hope rocket

Stocks were driven higher by the much better than expected ZEW sentiment survey in Germany with a big bounce from 31.5 to 48.2 this month for a much better result than the 35 the punditry were expecting. The Eurowide ZEW survey was equally amazing coming in at 42.4 from 31.2 last. How business sentiment has

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RBA & Treasury push for higher Australian dollar

The new and outspoken RBA board member, Heather Ridout, yesterday added the RBA’s voice to keeping the dollar elevated. From the AFR: “The Japanese election and statements by politicians had contributed to a significant depreciation of the yen since November.” Fair enough. We all know that the jawbone is a powerful tool for the senior

0

Macro Morning: Silent night

A boring a night for stock investors with the US out and Europe a bit mixed. The FTSE fell 0.16%, the DAX was up 0.47%, the CAC rose 0.18% while Milan and Madrid both slid 0.51%. The Italian elections are coming up fast so that might be a cause of market angst again soon depending

21

Industry policy cannot offset the Australian dollar

The Gillard government has released its new industry policy blueprint and it looks reasonable enough. Although Business Spectator gives it a caning, more even-handed analysis is available from Peter Roberts at the AFR: The extra $350 million to support innovation investment funds (IIFs) is a bold recognition that there remain market failures in our venture

1

Macro Morning: Walmart crash

Friday night was mixed with UK retail sales tanking 0.6% versus an expectation of a rise of 0.4% in January. US industrial production was also weaker than expected falling 0.1% in January against an expectation of a rise of 0.2% but the New York State Empire manufacturing survey was up sharply  to 10 from -7.78 last

1

Macro Morning: GDP whacks euro

Terrible numbers out of Europe overnight and likewise weak growth in Japan so as Houses and Holes posted earlier much of the world shrank in Q4 2012. Certainly the Japanese weakness was unsurprising but the data out of Europe, particularly Germany, was truly disquieting and suggests that the ECB will need to ease and if a

1

Macro Morning: Golden crumble

Early strength in European stocks and the euro gave way in US trade overnight and gold is breaking lower once again. Interesting last 24 hours in markets with the S&P hit 1525 for the first time since 2007 but reversed to sit lower at present. Euro was stronger initially after comments from the Russian Finance Minister which

45

Swan jawbone blasts Australian dollar higher

Wayne Swan really needs to learn how to make better use of the Treasurer’s jawbone. The AFR story that I covered this morning about Swan’s commitment to market-based currencies last night coincided with a surge in the Aussie of about three-quarters of a cent. I’ve circled the impolitic moment: Now, maybe it would have happened

8

The Australian dollar tells a naive truth

From the AFR today: Treasurer Wayne Swan has declared Australia’s support for letting financial markets determine exchange rates, amid rising unease about a global currency war. Mr Swan’s move adds Australia’s voice to those of other leading nations concerned that countries are actively devaluing their currencies to boost exports and growth. In an attempt to calm

5

Demand for Australian government bonds falls

Adding to the weakening Australian dollar meme, ANZ has a note out discussing weakening (although still strong) demand for Australian government bonds. The recent fall in Australian bond tender bid/cover ratios reflects a small softening in safe-haven demand, increased credit issuance, and investor preference for riskier assets. We think demand for ACGBs will be upheld and further continued weakness