Global Macro

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Aussie consumers among least confident in the world

From Roy Morgan Research: A special Roy Morgan survey conducted in Australia in conjunction with the Gallup International Association survey in 47 countries world-wide finds that Australia is one of the least confident countries in the world about 2020. Only 12% of Australians (down 32% points on a year ago) expect 2020 will be a

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UK mulls wave of low-paid “skilled” migrants to crush wages

With UK wage growth recently hitting an 11-year high: The Migration Advisory Committee (MAC) has recommended the Johnson Government drop the salary threshold for “skilled” migrants by more than £4,000: Skilled migrants from outside the EU currently need to have a job offer with a minimum salary of £30,000. But the Migration Advisory Committee (MAC)

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Australia is about to become coronavirus ground zero

There are two angles to examine as coronavirus spreads in China and South East Asia. The first is health related. The second is economic. Australia is about see a wave of new Chinese tourists and students just as coronavius slips the CCP noose. Some 350k Chinese toursists arrive through the January/February period, a large swath

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Is coronavirus an economic threat?

Unleash the panic, at News: International airports are screening passengers for a mysterious SARS-like disease that has been confirmed as passing from human-to-human and has also jumped China’s borders. The number of cases of the new coronavirus “2019-nCoV”, which causes a type of pneumonia, has surpassed 220 and authorities are concerned it could spread quickly.

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IMF downgrades global growth, hoses Australia

Via the IMF: Tentative Stabilization, Sluggish Recovery? Global growth is projected to rise from an estimated 2.9 percent in 2019 to 3.3 percent in 2020 and 3.4 percent for 2021—a downward revision of 0.1 percentage point for 2019 and 2020 and 0.2 for 2021 compared to those in the October World Economic Outlook (WEO). The

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Iran hits back and attacks US base in Iraq

by Chris Becker And so it begins. Via AP: Iranian state TV says Tehran has launched “tens” of surface-to-surface missiles at Iraq’s Ain Assad air base housing U.S. troops in response to the killing of top Iranian military commander Qassem Soleimani. It was not immediately clear whether the purported missile strikes struck the base or whether any

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Iraqi Parliament votes to kick out US troops

by Chris Becker Well this is a turn after the US assassinated a top Iranian general in Iraq over the weekend  – and it would at least make Trump happy by undoing even more of Obama’s legacy if the US completely got out of Iraq. From Reuters: Iraq’s parliament called on Sunday for U.S. and

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Druckenmiller: Long in 2020

Via Bloomie: A nice interview with Stanley which, with MB’s four horsemen of the apocalypse vanquished by policymakers, makes a good base case for some kind of global bounce in 2020. We still don’t think it will be a glowing recovery even if the fiscal spending helps, largly because China will keep slowing. We agree

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UK to copy Australia’s faux ‘skilled’ visa system

The United Kingdom’s Conservative Party is looking to copy Australia’s points-based migration system, which has been met with condemnation from employers wanting low and semi-skilled migrant workers: Boris Johnson’s proposed “Australian-style” points system to reduce immigration has been criticised for failing to understand how vital low and medium-skilled jobs are to the UK economy and

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Aussies drowning in household debt

The Bank for International Settlements (BIS) has released its global household debt data for the June quarter, which again ranks Australians as the second most indebted in the world. The next table summarises the ratios of household debt to GDP: As you can see, Switzerland (131%) takes the gold medal in the global household debt

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Stiglitz: It’s time to dump GDP

Nobel Prize winning economist, Joseph Stiglitz, has called on governments to dump GDP as the key economic measure of progress and instead focus on better measures of societal wellbeing: The way we assess economic performance and social progress is fundamentally wrong, and the climate crisis has brought these concerns to the fore… The standard measure

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Dr Doom: As stocks party, economies get worse

Nouriel Roubini at Project Syndicate: This past May and August, escalations in the trade and technology conflict between the United States and China rattled stock markets and pushed bond yields to historic lows. But that was then: since then, financial markets have once again become giddy. US and other equities are trending toward new highs,

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Vancouver house prices rebounding

The Teranet-National Bank House Price Index for October has been released, which shows that Canadian house prices fell by 0.1% across the 11 major markets, with annual growth improving to 1.0%: However, prices in Vancouver rebounded, rising by 0.2% in October to be down 6.2% since peaking in July 2018. The Real Estate Board of

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UBS: 2020 global growth to be weak again

Via UBS: We expect a recovery in 2020 but a much weaker one than consensus Things will get worse before they get better. Assuming any Phase One US-China deal is limited (no tariff roll-back), the existing tariffs should continue to work their way into the data and create an air-pocket in US growth in H1-20`

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CS: The everything bubble will also burst

Via the excellent Damein Boey at Credit Suisse: Another day, another set of US President Trump and China headlines. Overnight, we heard reports from Chinese officials that US officials were prepared to rollback existing tariffs as each phase of trade negotiations progressed. We later heard US officials confirm these reports from their perspective, although there

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Dalio: Fix wealth inequality or face “violent revolution”

Via the Hartford Courant: Two hedge fund founders on Tuesday called for the reform of capitalism to combat economic inequality and stem political upheaval. Before a crowd of about 200 at the Greenwich Economic Forum, a two-day alternative investment industry conference, Ray Dalio, founder of Bridgewater Associates, and Paul Tudor Jones, founder of Tudor Investment

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How far can the risk rally get?

Via the excellent Damien Boey at Credit Suisse: Overnight, US equities rallied to new highs, bonds weakened and the yield curve steepened on positive trade headlines: US officials suggested that a deal with China is “almost there”. Chinese officials expressed doubt as to where phase I of the trade deal will be signed, questioned how

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Ray Dalio is the new Dr Doom

Not without justification: Billionaire Ray Dalio says the global economy faces a ‘scary situation’ https://t.co/UQTmCDqrRu pic.twitter.com/NvBofCJEno — Bloomberg Economics (@economics) October 29, 2019 A few points. The technology revolution is as much solution as it is problem. Productivity gains will lift income to deleverage private sectors. It is over to governments whether or not this

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Dr Doom hoses MMT

Via Nouriel Roubini: With the global economy experiencing a synchronized slowdown, any number of tail risks could bring on an outright recession. When that happens, policymakers will almost certainly pursue some form of central-bank-financed stimulus, regardless of whether the situation calls for it. A cloud of gloom hovered over the International Monetary Fund’s annual meeting

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What will a trade war pause fix?

Via Morgan Stanley, the answer is nothing: Trade tensions between the US and China have been the single biggest source of uncertainty for the global economy over the past 18 months. After a protracted period of negotiations, some progress has been made towards a deal, with a potential Phase 1 to be signed in mid-November. How

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Australia tumbles down global wealth rankings

Credit Suisse has released its 2019 Global Wealth Report, which reveals that the recent housing bust has pushed Australia down the wealth rankings, falling from second place to fourth: According to Credit Suisse: Household wealth in Australia grew quickly between 2000 and 2012 in USD terms, except during 2008. The average annual growth rate of

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When will oil crack?

Via the EIA last night: Brent crude oil spot prices averaged $63 per barrel (b) in September, up $4/b from August and down $16/b from the September 2018 average. Brent spot prices began September at $61/b and increased to $68/b after attacks on major Saudi Arabian oil infrastructure disrupted the country’s crude oil production. However, Brent spot

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Global recession or inventory cycle?

Is there any difference? Via the excellent Damien Boey at Credit Suisse: What a wild ride it was for bonds overnight! In the Asia-Pacific time zone, bonds sold off aggressively outside Australia, as investors became worried about a potential slowdown in BoJ asset purchases in a fairly illiquid environment. But in the US time zone,