S&P downgrades Spain

Find below the full text of the recently announced Spanish downgrade, which would make Delusional Economics proud (in a sad kind of way): We believe that the Kingdom of Spain’s budget trajectory will likely deteriorate against a background of economic contraction in contrast with our previous projections. At the same time, we see an increasing

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Macro Morning (updated)

Macro Wrap EDIT: Just in, Standard and Poors has just downgraded Spain to BBB+ from A on “concern the nation will have to provide further fiscal support to the banking sector as the economy contracts” A mixed night in the markets, which got off to a good start in Europe, then stumbled on the release


The US recovery is thinning

If the new normal thesis holds then the US recovery meme is now running on empty. That’s not say we’re dipping towards a recession, we’re not, I don’t think. But growth is clearly slowing and the mix is getting less convincing. Consider manufacturing expansion, a key plank in the new normal thesis because it is


April 27 Links – Rally Rally Rally

Morning all – Markets were up in the US and its onward and upward for risk – here’s The Prince’s  full wrap at Macro Morning. Here is what caught our eye and will, we hope, add to your day today. Global macro:  A nice summation of three big challenges facing governments and countries and why


Trading Day: Seven West goes south

Trading Day covers the relevant moves in the Asian stock, commodity, debt and currency markets highlighting trading ideas and investment opportunities. Remember to read “Trading Week“, published Saturday morning, to put these events and ideas in context. A slow data day across Asian markets, that basically began and ended with the New Zealand Reserve Bank


Roy Morgan Consumer Confidence off the mat

I haven’t bothered with the Roy Morgan Consumer Confidence measure for a few weeks because the moves have been quite small. However, there’s a little rebound developing with three up weeks in  a row: Consumer Confidence is at 112.4pts (up 0.7pts in a week) and up for the third straight week, according to the Roy


NAB Commercial Property Index falls

For those who don’t know, NAB releases a quarterly index tracking commercial property. The two outstanding points this quarter are the ongoing retail carnage, hitting new lows in the quarter, and the optimistic projections that seem to characterise this industry relentlessly. NAB Commercial Property Survey _March-2012 \


Coal and Coles

After the uninspiring Woolworths result, all eyes were on Wesfarmers and its coal/Coles. Brokers were generally pretty neutral; not convinced that the Coles result implied a re-rating. A “good result” but in line with expectations. It does at least reassure over the dividend, estimated to be about 5%. Goldman is one of the more bullish with


DEEWR job vacancies rise

The weirdness of Australian employment data continues today with skilled job vacancies rising again. Despite the general feeling of gloom, both the seasonlly adjusted and trend series are now rising: Monthly Change Increased by 2.6% to 88.5 (Jan 2006 = 100) Increased in six of eight occupational groups Strongest rises recorded for Machinery Operators and


China links

Courtesy of Sinocism: China’s sports authority commits to go deep in soccer corruption crackdown – Xinhua | English.news.cn this mean some who may have been protected by bo xilai, aka the “soccer mayor” from his time in dalian, may know be in trouble? Photos of latest sea trial of China’s aircraft carrier – Xinhua |


Kohler revises history

If there is one thing that gets the old MB goat, it’s a bit of historical revisionism. Alan Kohler gives us an epic dose today in his Double the egg on the RBA’s face: The Reserve Bank’s economics department had a bad year in 2011, and as a result the board is now high and dry


Macro Morning

Macro Wrap World markets seem enamored with one company and one man alone at the moment – Apple (AAPL) and Fed Reserve Chairman Ben Bernanke (The Bernank). The former beat estimates – resoundedly,almost double – and soared nearly $50 a share overnight, lifting all US bourses (except the Dow, which was up modestly).  The Bernank


Victoria confesses

By Leith van Onselen Earlier in the week I warned how the Victorian economy and Budget are being placed under increasing pressure from the state’s sharply slowing property market, which is acting to reduce growth and employment whilst hammering the state’s tax take. Today, we received additional confirmation of Victoria’s plight, when it was revealed


Rental vacancies flat in March

By Leith van Onselen From SQM research comes the news that Australia’s rental vacancy rate remained flat in March at 1.7% (up 0.2% year-on-year), with only 243 vacancies added during the month: According to SQM Reserach’s Managing Director, Louis Christopher: It appears that Australia’s rental market is remaining excessively tight for the time being with


Weekly RP Data house price index analysis

By Leith van Onselen If there’s one industry that will welcome the upcoming cut in official interest rates it’s the housing industry where, according to the RP Data-Rismark daily home values indices, overall Australian capital city home values continued to contract in the week to 25 April 2012, led by Melbourne (see below chart). According to RP


The ECB is on Mars

Overnight the president of the European Central Bank, Mario Draghi, gave a speech to the Hearing at the Committee on Economic and Monetary Affairs of the European Parliament. The speech was not particularly out of line with what Mr Draghi usually says, such as: Available indicators for the first quarter of 2012 broadly confirm a


Chinese banks and stealth easing

Although many are probably still hoping for official monetary cuts in China, credit easing appears underway anyway in mortgages. This is not completely new. In fact, some weeks ago I became aware of some banks offering mortgages with interest rates reduced by 10-15% for first-time buyers.  Sina is now reporting that reduction of mortgage rates


US earnings trace slowing China

Several bell weather US firms have reported earnings that provide an insight into the state of the Chinese economy. ABB (ABBN.VX) and Caterpillar (CAT.N) both blamed shifts in their accounts on slack Chinese demand. To start with, ABB’s bottom-line beat expectations but margins declined.  The company’s presentation said that a “Weaker China offset by good growth in N America”. 


Soc Gen tells Aussies to buy gold

Courtesy of FT Alphaville, comes the following hatchet job on Australia from Society General analyst, Dylan Grice: When you scratch the surface of the Australian ‘miracle’ you don’’t just find an unmiraculous commodity super-cycle: you also find an equally unmiraculous credit super-cycle as well. A credit bubble built on a commodity market built on an


FOMC statement

Here is last night’s FOMC statement: Information received since the Federal Open Market Committee met in March suggests that the economy has been expanding moderately. Labor market conditions have improved in recent months; the unemployment rate has declined but remains elevated. Household spending and business fixed investment have continued to advance. Despite some signs of


April 26th Links – An Apple for the Fed

Morning all, here is what caught our eye and will, we hope, add to your day today. Check out Macro Morning for a full market wrap-up. Global macro:  Video of the Presentations from the Just Banking Conference in Edinburgh last week – here I have been terribly uncomfortable about what happened at MF Global recently, particularly the piece


Anzac Day Links

Morning all – On this Anzac Day we salute and thank the men and women who have served and are serving. Here is what caught our eye and will, we hope, add to your day today. Global macro:  Bloomberg overnight market wrap up – here Is every democracy destined for the problems of Greece? – Democracy’s


Trading Day: D is for Deflation

Trading Day covers the relevant moves in the Asian stock, commodity, debt and currency markets highlighting trading ideas and investment opportunities. Remember to read “Trading Week“, published Saturday morning, to put these events and ideas in context. In case you were vacationing on Mars today, the big mover was the CPI (consumer price index) print,


Fairfax to merge titles with Business Spectator?

From Ad News: Fairfax Media and Alan Kohler’s media independent, which houses Business Spectator and the Eureka Report, are in advanced discussions about forming a new unit which would include BRW and Smart Investor under Kohler’s chairmanship. A deal is yet to be inked but AdNews understands both sides are enthusiastic about the prospects, which


Who said don’t buy Aussie bonds?

Haters gonna hate. Aussie 10 year government bonds hit a near record low in yields today (3.64%) after the “surprisingly low” CPI print (which I remind you dear readers, is NOT a measure of inflation). Remember, as yields fall, prices rise – as the above chart clearly shows. I think it was, um, the entire


Here come the rate cuts

By Leith van Onselen As summarised earlier by Houses and Holes, the Australian Bureau of Statistics (ABS) this morning released the Consumer Price Index (CPI) data for the March quarter 0f 2012, which showed an absence of inflationary pressures in the Australian economy: According to the ABS, headline CPI rose by only 0.1% in the


What inflation?

And as expected, risks were on down side. 0.1% on the quarter. What inflation? MARCH KEY FIGURES Dec Qtr 2011 to Mar Qtr 2012 Mar Qtr 2011 to Mar Qtr 2012 Weighted average of eight capital cities % change % change All groups CPI 0.1 1.6 Food and non-alcoholic beverages -2.1 -2.5 Alcohol and tobacco