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Mixed signals from the RBA on Europe

John Edwards of the RBA was on the hustings yesterday talking up the prospects for Australia amidst European worries. From MarketWatch: A European recession won’t be enough to seriously endanger growth in Australia and Asia as a whole, a recently-appointed board member of the Reserve Bank of Australia, or RBA, said Thursday. A likely European

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Think positive

Amidst the deepening market gloom, Deutsche Bank is trying to inject some optimism. It is certainly an interesting inflection point. This kind of fear is different in that it is not fear of “normal” recession, it is fear that the system itself is fundmanetally broken. The GFC is rolling on, in other words. This fear

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Margin lending collapses

The Reserve Bank of Australia (RBA) released the September 2011 margin lending statistics (D10) today (but have not released household finance data (B21), which was scheduled at the same time). I’ve covered this data previously, as it is one of the sub-factors in my macro model for the Australian share market, as I explained then:

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Wages boom slipping away

So, the ABS has released its two wages reports now, Labour Price Index (WCI) yesterday and Average Weekly Earnings (AWE) today and the results show a clear slowdown in trend growth. These two measure slightly different things. The WCI is defined as: The wage, non-wage and labour price indexes measure changes over time in the

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China links

Links cross-posted from Sinocism. China (Country Report) in Countries at the Crossroads 2011: A Survey of Democratic Governance by Carl Minzner :: SSRN – The Trouble With Taiwan’s New Prostitution Rules – China Real Time Report – WSJ – decriminalized China’s Home Price Slide Has Analysts Betting on Government Policy Change – Bloomberg – Analysts at firms including

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The delusional ECB

Last night it was the UK’s turn on the cold tap, with their unemployment figures and central bank leading the charge: UK unemployment rose by 129,000 in the three months to September to 2.62 million, as youth unemployment rose above a million. The jobless total for 16 to 24-year-olds hit a record of 1.02 million

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Chart of the Day: Gold at $2000 AUD oz?

Today’s chart is inspired by a conversation with the The Bullion Baron’s whose blog has been successful in forecasting the price of gold – but in AUD instead of the oft-quoted price in USD. The dynamics between the USD, the AUD and gold are interesting, to say the least. We have seen how risk assets

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Oil vs QE3

So, last night, the US October CPI deflated. Yes, month on month it fell 0.1%. Year on year was less salutary, up 3.5%. Here is the breakup: The big fall year on year was in the energy index, down from 19.3 this time last year to 14.2 this year. So, with the CPI disinflating some

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China reboots money supply

Unknown to everyone except the People’s Bank of China, at the time of announcement of the monetary statistics, the PBOC had quietly expanded the definition of M2 money supply, and announced it only last night in a statement. The statement essentially said that the new M2 definition has been used in the October monetary statistics, which showed

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RPData November report

RPData have recently released their November market update report (available below). Much of this data was previously presented in their recent YouTube report , however the report is still worth a look as it contains many other pieces of useful information. RPData November Report

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Why are inner city house prices so high?

Australian cities are uniquely monocentric, with a highly dense core of both residential dwellings and commercial activities, and far-flung low-density suburbs.  For the investor, the pattern of growth of the city is important for two reasons. It explains the strong relationship between yields and distance from the CBD for all property types, and it demonstrates

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Links November 17: ECB inaction

Up: ore (up .6% but 12m swaps down 1.1%), $US, Treasuries, energy, CRB Down: gold, metals, euro, Aussie, grains Contagion: Greece 2 Year 5 Year 10 Year Portugal 2 Year 5 Year 10 Year Ireland 2 Year 5 Year 10 Year Spain 2 Year 5 Year 10 Year Italy 2 Year 5 Year 10 Year Belgium 2 Year 5 Year 10 Year France 2 Year 5

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Trading Day: slipping away…

The S&P/ASX 200 Index closed down 38 points or 0.9% lower to 4247 points today. In after hours trading, the index is down a few points, with Euro and US markets pointing to lower opens. Asian markets had a similar day, with Japan’s Nikkei 225 also down 0.9% to 8463 points, the Hang Seng losing

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A tipsy Xmas and houses looking good

Consumers plan a modestly increased Christmas outlay this year versus last and increasingly think that now is a good time to buy a house. Those are two of the findings in Westpac’s excellent November Red Book.  No matter what business you’re in, reading this is worth 10 minutes of your time. It is the defining document

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Introducing China links

Welcome to a new MB feature, courtesy of the linkage prowess of the blogger Sinocism. We will be reproducing these exceptional Chinese links daily before lunch time: Ex-Motorola Engineer Stole Trade Secrets for Chinese Company, U.S. Says – Bloomberg – An ex-Motorola Inc. software engineer should be found guilty of stealing trade secrets from the company

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DEEWR jobs report confirms weakness

The signs are everywhere that employment has slowed but, as we know, the ABS figures continue to paint unemployment in a sideways pattern. Today there is yet more evidence that that will not last. From DEEWR Job Vacany Report for October: The Internet Vacancy Index (IVI) declined by 1.9%1 in October 2011, the seventh consecutive

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Why is BHP cheap?

BHP and Rio have been pretty disappointing performers considering there is a commodity boom, one of the few bright spots in the global mess. The stock is down by almost a fifth since mid year. At some point it has to be good buying. UBS has a buy on the stock, with a 12 month price

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Leading indicators soften

The Westpac/Melbourne Institute Leading Index is out and projects a return to trend growth: The annualised growth rate of the Westpac–Melbourne Institute Leading Index, whichindicates the likely pace of economic activity three to nine months into the future, was3.3% in September 2011, basically in line with its long term trend of 3.2%. Theannualised growth rate of the

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Wages rebound despite weakness

The Melbourne Institute monthly wages report is out and sees: Total pay growth over the 12 months to November 2011 rebounded to 3.7 per cent from a modest 2.9 per cent rise in the 12 months to August. Expectations also rose and are now just above the RBA’s inflation target band. According to Dr. Edda

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Unintended consequences of covered bonds

Recently Australia passed legislation so that Australian ADI’s can issue covered bonds and last week APRA released a paper and APS 121 Guidelines on how APRA is going to regulate the issuance and management of covered bonds. But the legislation and the regulator have created an infrastructure which may have serious consequences for Australia’s banking system. The

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Chart of the Day: (P)IIGS share prices

Today’s chart comes from Dr Ed Yardeni’s blog, comparing the performance of the (P)IIGS (Portgual, Ireland, Italy, Greece, Spain) share market indexes (Portugal is not included) for the year so far: Greece is obviously the worst performer, down 48% with Italy not doing so bad, but still in bear market territory down over 20%. How

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Tackle risk for super returns

Yesterday SuperRatings issued its September results for Australian superannuation funds. September continued the poor performance of this year, with year to date returns for a balanced fund of minus 4.88%. Eighty percent of investors have their super in a balanced fund so the pain is widespread. It doesn’t get much better when we look at

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Europe’s economy edges towards contraction

Euro-zone Q3 GDP came out last night and as expected the numbers weren’t great: Europe’s economic expansion failed to accelerate in the third quarter as Germany and France struggle to shore up a region bracing for a recession sparked by an escalating debt crisis. Gross domestic product increased 0.2 percent from the previous three months, when it

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Can the US consumer carry us all?

The US consumer is back, defying the odds and me. Last night we had October retail sales and results were good. From Calculated Risk: On a monthly basis, retail sales were up 0.5% from September to October (seasonally adjusted, after revisions), and sales were up 7.9% from October 2010. From the Census Bureau report: The U.S.

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Bond, corporate bond

Australians (particularly their fund managers) have traditionally had a love affair with equities – in fact we have the largest portion of our superannuation wealth invested in them than any other comparable country, as shown in this graph (h/t to The Prince). However the GFC ,combined with the last 6 months of Euro-trashed share prices, has

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Wild rivers, or wild politics?

Queensland’s alternative Premier, former Brisbane Lord Mayor Campbell Newman, has been on the campaign trail for most of 2011.  Last week he announced the Liberal Party’s position on Queensland’s Wild Rivers Legislation.  He intends to remove three rivers in Cape York from the legislation, which is no surprise given that Tony Abbot announced a year

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November 16 links: US consumer is back

Rocket: ore (another 5%, 12m swaps up 2%) Up: $US, Treasuries, grains, energy, CRB Flat: gold, metals, euro, Aussie Contagion: Greece 2 Year 5 Year 10 Year Portugal 2 Year 5 Year 10 Year Ireland 2 Year 5 Year 10 Year Spain 2 Year 5 Year 10 Year Italy 2 Year 5 Year 10 Year Belgium 2 Year 5 Year 10 Year France 2 Year 5

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Trading Day

The S&P/ASX 200 Index closed down 19 points or 0.44% lower to 4285 points today, after reacting to the falls on EU and US risk markets last night. In after hours trading, the index is up a few points, with Euro and US markets pointing to mixed opens. Asian markets had a worse day, with

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Credit cards a Christmas treat

The RBA has released its monthly credit card data yesterday (missed it) and to nobody’s surprise credit cards very much remain on the nose. Here is the chart of the various line totals: Usage was up 9% yoy, balances and limits 3% apiece. To give you some idea how slack this demand is, here is