ASX Shares Daily – 3rd July

  By Chris Becker These daily updates need to be placed in context with the longer trends and drivers amidst the overall technical picture, so head to Macro Investor for a free trial. Former “Trading Week” readers will find it reborn as “Technicals“, published 8am each Monday morning.   As you can see in the table opposite,

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RBA holds

The RBA July decision is out and as expected it’s a hold. Here is the statement: Statement by Glenn Stevens, Governor: Monetary Policy Decision At its meeting today, the Board decided to leave the cash rate unchanged at 3.50 per cent. Growth in the world economy picked up in the early months of 2012, having


Aristocrat holds back the tide

One Australian manufacturing firm that is maintaining its business is Aristocrat Leisure, which makes slot machines, gaming systems and accessories. The company’s first half earnings forecast, suggests full year earnings are heading towards growth of 10-15%. The question is: how will gambling fare in recessionary times? Not all that well, if global casino capital expenditure is any indicator; it is


Melbourne apartment boom goes ballistic (again!)

By Leith van Onselen There’s life in the Melbourne construction boom yet, with the release of the Australian Bureau of Statistics (ABS) building approvals data recording a seasonally-adjusted 27.3% (2,915 unit) rise in dwelling approvals in the month of May, led by Victoria where approvals rose by 32% (1,267 units): Victoria’s currently accounts for 36%


China’s non-manufacturing PMI rises

The Chinese services PMI rose in June to 56.7 from 55.2 in May. As Reuters says: China’s fast-growing services industry has so far weathered the global slowdown much better than the factory sector, with the PMI consistently signaling healthy expansion and hitting a 10-month high of 58.0 in March. And I guess, anywhere but Australia


The volume around David Jones – it does go to 11!

              UPDATE: AFR is reporting that “ASIC has confirmed it has launched an investigation into trading in David Jones’s shares and disclosure issues relating to an abandoned takeover approach”. As mentioned in yesterday’s ASX Shares Daily, there has been an unravelling debacle over the recent “mystery” takeover bid and subsequent withdrawal


Bulk stall = China stall?

Here’s a chart of iron ore spot (white), futures (yellow) and major Chinese steel prices (rebar green and billet purple), as well as China’s GDP (red): Without putting too fine a point on it, it is fair to say that there is a correlation between iron ore and steel prices and Chinese growth. Anyone describing the


Bank funding costs easing

What looks to be a significant correction in Australian bank CDS prices is under way, down 18% from the May peak and 9% in the last week or so. We can take CDS prices a proxy for the spread over swap that banks will have to pay for 5 year unsecured debt: As you can


ABS fesses up on employment data

From Peter Martin (h/t edanielsen) today comes a not altogether surprising confession from the ABS about its labour market stats: The Bureau of Statistics has got the official employment figures wrong, and although it is happy to acknowledge the errors, it won’t correct them on the official record because it would cost too much money. Officially,


MacroBusiness Morning

When you have had a move like we had Friday there is usually a time for reflection by market players. This is particularly so when the short term technicals are so over cooked as they were for many markets and particularly when the rally occurred on the last trading day of the quarter as was


Take claims of affordable housing with a grain of Salt

By Leith van Onselen Two years ago, the Sunday Telegraph published an article citing Commsec research showing the sharp deterioration of housing affordability over the past 50 years: AUSTRALIANS have to work almost three times harder to pay off the average family home than they did 50 years ago. Figures compiled by CommSec for The


RBA to hold, Mckibbin advises hike

From the AFR this morning: One of Australia’s top economists, Warwick McKibbin, wants the Reserve Bank of Australia to raise interest rates today to crimp accelerating economic growth. Professor McKibbin, who was a member of the Reserve Bank board until a few months ago, made the recommendation as a member of the Australian National University’s so-called shadow


Death of the China cult

Courtesy of Also Sprach Analyst. People in Hong Kong have a long history of mistrust of China. This city, after all, was a colony of the British Empire for more than a century, and has only been under Chinese rule (under one country two system, to be precise) for a mere 15 years. In this city, you seldom


The European economy sinks

I discussed yesterday that the success of last week’s EU summit needed to be measured on a political scale not an economic one. There were obviously economic ramifications from the outcome, but the ratification of whatever they eventually turn out to be is likely to take many months of further politicking. In the meantime the downward


3rd July Links: RBA day

Global Macro: Libor scandal: How I manipulated the bank borrowing rate Telegraph UK, and here come the lawyers Libor manipulation and the invisible whistle FTAlphaville United States: ISM Manufacturing index declines in June to 49.7 Calculated Risk US shale boom is starting to slow Business Insider Europe: Finland to block ESM secondary bond buying Reuters,


ASX Shares Daily – July 2nd

By Chris Becker In case you’ve wondering what we’ve been up to these last few months, we’ve launched the premium “Macro Investor” newsletter. And that’s where you’ll find the former Trading Week – but it has turned into much, much more, published Monday morning first thing alongside each edition of Macro Investor. Click here for


North Asian PMIs head down

As we know, yesterday’s offical  China PMI was dour, it was followed up by the final HSBC PMI today, which dropped marginally since the flash to 48.2. Now we have Korea and Taiwan signalling more of the same. Korea came in at: 49.4 in June, down from 51.0 in the previous month and pointing to


SQM hits “inaccurate” RP-Data daily index

Please find below a press release from SQM Research questioning the efficacy of the RP Data-Rismark daily home values index: Upon the back on recent commentary released by RP Data-Rismark in relation to increasing house prices in Australia, property research house SQM Research would like to take this opportunity to formally state our contrasting beliefs


NAB’s online index slows again

NAB has released its Online Retail Index for May and it shows ongoing deceleration: For the 12 months ending May 2012, Australia’s total online spending was around $11.3 billion. This level is equivalent to 5.2% of traditional bricks & mortar retail spending (excluding cafés, restaurants and takeaway food) for the year ended April 2012. The NAB Online


Auction clearance rates going sideways

By Leith van Onselen Auction clearance rates over the weekend were 59% in Australia’s two major markets – Sydney and Melbourne. This compares to a year-to-date average of 62% and 61% respectively, according to the Real Estate Institutes of New South Wales and Victoria. In Victoria – usually the auction capital of Australia – the


TD Securities shows deflation in June

TD Securities monthly inflation for June is out and shows deflation on the month of -0.2%: That’s a big move down and goodness only knows how it will play into June quarter GDP results. Could we get another quarter of deflationary boom? Year on year inflation is now 1.6%: Obviously if the CPI follows, there’s


PMI has a decent bounce

The AIG PMI is out this morning and although still contracting shows a decent bounce: Manufacturing activity contracted for a fourth consecutive month in June, but the pace of contraction slowed significantly. The seasonally adjusted Australian Industry Group-PwC Australian PMI® rose 4.8 points to 47.2 (readings below 50 indicate a contraction in activity with the distance from 50 indicative of


Introducing “Macro Investor” (updated)

In 2011/12, the MacroBusiness blog forced a passage through the bog that is Australia’s failing business media. The success of the site was quite something. With a founding investment of $1,500, zero marketing, no employees and no supporting network, MB reached levels of traffic in May ’12 at roughly one third that of Business Spectator


MacroBusiness Morning

The European deal announced late in our trading day Friday ignited a risk rally like we haven’t seen for some time. We have trend breaks in a number of markets we follow and the overwhelming feeling is one of relief. Certainly from a fundamental standpoint there are many who believe this is just another band


China’s official PMI slows its descent

China released its official PMI yesterday and the result was not so great. The headline number showed continued expansion at 50.2, down 0.2 on the month, a decelerating decline. However the internals are not so good with real weakness in new orders, especially exports. There is some encouragement in the slowing but the trend in the