Global Macro


Aussie bonds enter rate hike Twilight Zone

DXY was down last night: AUD was stablish: Gold firmed: Oil fell: And remains vulnerable with a huge speculative long: Base metals lifted: Big miners fell: EM stocks struggled: The EM junk tide is definitely going out. A slowing China signal? Short end Treasury yields marched higher, the curve flattened again: Not so bunds: Stocks


“Extremely difficult” for US to re-join TPP

By Leith van Onselen Following intense lobbying from US farmers and the Republican Party, it was revealed on Friday that US President Donald Trump has ordered his senior economic and trade advisers to examine the possibility of the US re-entering the 11 nation Trans Pacific Partnership, dubbed by MB as “TPP 2.0”. However, international trade


MB Radio: Australia’s hidden normal comes out

  Ahead of the May budget Gunnamatta spoke with Leith van Onselen and David Llewellyn-Smith about the economic outlook and the unfolding Australian economic narrative.  In a wide ranging discussion Leith and David cover Australia’s reliance on commodity exports and the implication a subsiding global commodity market has for this dependence, as well as the potential


Japan shows how an economy can age gracefully

By Leith van Onselen After spending a decade worrying about the rise of Japan, economists (and population boosters) in Australia have frequently labelled Japan an ‘economic basket case’ due to its ageing (and falling)population and its slow growth in headline GDP. I have frequently challenged this argument, citing Japan’s enviously low unemployment rate, which is


Who wins a US/China trade war?

It’s over. China has won. So says the Global Times: China on Wednesday unveiled a list of imported products from the United States worth $50 billion that will be subjected to higher tariffs, including soybeans, automobiles, aircrafts and chemical products. The decision, made by the Customs Tariff Commission of the State Council, could also involve


AEP: Trade war prelude to real war

Nobody out-bears AEP. Nobody: Donald Trump’s declaration of tariff warfare against China has little to do with trade. It is about raw power, a struggle over which of the two sparring hegemons will dominate technology and run the world in the 21st century. The pretence of cordial coexistence has all but ended in the Hobbesian


Vimal Gor: Stocks top is in, brace for pain

Via BT’s excellent Vimal Gor today: There are two attitudes you can take to the February 2018 “flash crash”. The first, and overwhelmingly the most popular, is that this was a technically driven correction in the markets, exacerbated by carry monkeys such as the short-VIX crowd, and that the pause since then has provided a


Trade agreements “serve rent-seeking politically well-connected firms”

By Leith van Onselen MB has long derided Australia’s ‘free trade agreements’ (FTAs) for their complexity and deleterious efficiency impacts, their anti-competitive measures around intellectual property, as well as some FTAs containing clauses enabling trading partners to sue sovereign governments (called Investor-State Dispute Settlement or ISDS). On Friday, the University of Chicago’s Pro-Market Blog published


Bain warns of automation apocalypse

By Leith van Onselen Last week, job search website Adzuna estimated that around one-third Australian jobs could be lost to automation by 2030, with lower-skilled and manual labour jobs most at risk. Yesterday, Zero Hedge reported on a fascinating keynote address by the Managing Director of Bain & Company’s Macro Trends Group, Karen Harris, entitled: “Labor


US and China work trade solution through back channels

Via the WSJ: China and the U.S. have quietly started negotiating to improve U.S. access to Chinese markets, after a week filled with harsh words from both sides over Washington’s threat to use tariffs to address trade imbalances, people with knowledge of the matter said. The talks, which cover wide areas including financial services and


Markets puke on Donald’s China tariffs

DXY firmed last night: AUD was flogged across the board: Gold warmed: Brent fell: Base metals too: Big miners are in trouble: EM stocks were smashed: Junk too: Treasuries were bought: And bunds: Stocks were pounded: The headline risk for the night was The Donald, via FT: The Trump administration plans to impose 25 per


Tech wreck

DXY was weak last night: AUD was too against DMs: Better against EMs: Gold firmed: Oil too: Base metals were hit: And miners clubbed. The post-2015 bounce is done: EM stocks were hit: Junk too: But Treasuries still sold: Not bunds: Stocks took it for the team: There’s no broad risk off here. It’s more