8

Special: China’s declining demographic dividend

China’s rapid growth in the past, particularly in manufacturing, is in part due to the fact that there is a large reservoir of surplus rural labour, which was able to supply the labour demand in the industrialisation in urban China. Because of that, manufacturers were able to hire more labour as they expanded without having

Latest posts

19

March 8th Links: US jobs boost

Markets: Down:  USD Flat:  Treasuries,  grains, ore Up: gold,  euro,  Stocks, Aussie, CRB,  energies Sovereign Yields: 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

12

Trading Day – 7th March

More unicorn hunting today as the bearish mood takes over as economic growth figures disappoint. What needs to be put in context is, just like the recent reporting season, profits and the economy are still growing, both around the 2% rate. The rate of change is always the worrying sign, not the headline number. Back

21

Europe back on the menu

As you are surely aware by now, the European markets took a bashing overnight with the most of the European headline markets heading down by over 3%, Austria lead the way with 4%. We also saw a reversal in periphery bonds with upwards pressure on Portuguese, Italian and Spanish debt. There were two pieces of

0

China links

Courtesy of Sinocism: Attorney General Holder defends execution without charges – Glenn Greenwald – Salon.com – why would China listen to any American criticism of its human rights record?// the “process” which Eric Holder yesterday argued constitutes “due process” as required by the Fifth Amendment before the government can deprive of someone of their life: the

25

The Australian economy is not growing at trend

Just before Christmas, I bemoaned the state of economic reporting by the Australian financial media and associated economist punditry, which seemed to be stuck in either “permabull” or “permabear” status. Whenever the quarterly Gross Domestic Product (GDP) figures come along, like they did today, the former status is usually supplied with a “raucous display of

8

Demand by state

We don’t actually have GDP by state until later but a reasonable proxy is state final demand. The quarter was a different mix to much of last year with QLD leading quarter on quarter growth at 1.2%, NSW next on 0.8%, SA third on 0.2%, VIC entering recession territory on -0.5% and WA making a

7

Charting the RBA

The Reserve Bank of Australia (RBA) has released its monthly Chart Pack  – “a set of graphs that summarise macroeconomic and financial market trends”. After this mornings quite disappointing GDP results, let’s have a closer look at a select few interesting and relevant charts for MacroBusiness readers. World Economy First, what will likely be our

1

Energy for the future

Energy and mining are the obvious best bets in such a gloomy market, so it is little surprise that Macquarie is advising along those lines. It is looking at energy and mining services, the latter being an operational play rather than a bet on commodity prices. Macquarie is anticipating a tough time ahead for earnings

39

Big miss in GDP

The Australia Bureau of Statistics (ABS) just released the National Accounts data for the December quarter of 2011, where Gross Domestic Product (GDP) increased by 0.4% seasonally adjusted versus 0.7% consensus, and 2.3% over the year, still below trend compared to the pre-GFC era: Looking through the results, real (adjusted of inflation) net national disposable

15

Market Morning

So you wake up this morning, have a double espresso because the little Princess is teething and check the markets – Ding! And that’s not from the espresso… So what happened? Why the “sudden” risk-off? Apart from the expected negative GDP (gross domestic product: i.e the failed method of measuring economic success) print for the

12

Phil Lowe on structural change

Deputy Governor of the Reserve Bank, Phil Lowe, is speaking today at the AIG Economic Forum. Here’s the bitter pill he will deliver: Structural Change in the Australian Economy Structural change is, of course, something that is not new. It is one of the ongoing features of all economies. Over the past half a century,

5

Australian dollar falls out of bed

The Australian dollar fell out of bed last night as equities fell, emerging market sentiment waned and so called risk assets generally just turned to “off”. It sits this morning at around 1.0530 having made a low at 1.0524 earlier this morning. Where to now? On the hourly chart it looks a little over sold:

29

Insiders maul R.P.Data’s daily house price index

It is been some time since we have been able to view the spectacle of  the Australian data providers having a stoush over their data provision methodologies. But have no fear, SQM Research‘s Louis Christopher appears to be ready for another round with an appraisal of RPData/Rismark’s new daily index in his latest newsletter. I have added

101

The commodities super cycle ends

Find below the meat of yesterday’s Credit Suisse report which declares the “commodity super cycle” dead.  If you take just one point from this analysis it should be this: China can keep growing at 7-8% without Australia benefiting one jot. And remember, this is the optimistic scenario for China. The pessimists see the transition to

7

Bank funding costs easing

From Banking Day this morning: Spreads on term debt for major banks are narrowing, judging by domestic and offshore deals concluded over the last day or so. Westpac surprised the domestic wholesale debt market yesterday with a A$2 billion, two-tranche five-year bond issue. The bank was able to achieve tighter pricing than was the case

8

March 7th Links: EU tumbles

Markets: Tumbles: euro, EU Stocks Up:  USD Flat:  Treasuries,  grains, ore Down: gold, Stocks, Aussie, CRB,  energies Sovereign Yields: 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

11

Trading Day – 6th March

The bear was hunting unicorns today and what a feast. The local slot machine, the S&P/ASX200,  continued to absorb the news of a new Chinese growth target amidst the RBA decision to hold on rates, and a blowout in the CAD. The result was a day long sell-off, down 1.4% or 58 points to 4204

6

BOQ hikes

Here’s what BOQ said a month ago: Thursday, February 09, 2012 Following increasing speculation regarding interest rate movements, BOQ would like to reassure customers that we are holding our standard variable interest rate steady, regardless of competitors’ movements, until the next RBA meeting. “We understand many home-owners and small business owners are concerned about out

15

Welcome to the Goldilocks economy

The Reserve Bank (RBA) surprised no one by holding rates steady this afternoon after this morning’s  Board meeting.  It really is a complete rehash of the last statement and Glenn Stevens address to Parliament back on February 24th. The economy still has to “weaken materially”  to allow the ‘inflation outlook” to give them room to

3

CAD and GDP

We’re a bit short handed today so here is a take from NAB on the Balance of Payments and implications for tomorrow’s GDP: Today we saw the last two quarterly partials ahead of tomorrow’s GDP release with the Q4 balance of payments and government spending reports. From the BoP, the net exports contribution to GDP was

35

Bogan exodus continues

The Australian Bureau of Statistics (ABS) has just released overseas short-term arrivals and departures figures for January, and the macro driver hasn’t changed since our Unconventional Economist, Leith van Onselen, reported on the December and annual figures last month (and just happens to be on a Bogan Exodus himself which is why I’m writing this):

0

Expanding the realm

Crown’s possible takeover of Echo Entertainment has brokers pretty unenthused. Deutsche has a buy on the stock, and a price target of $11.10. Deutsche is arguing that the fundamentals look alright, irrepsective of the takeover speculation. Deutsche reasons Crown won’t get a board seat unless it moves beyond 10%, and it won’t get beyond 10% without regulatory approval: Crown

49

McKibbin warns of rate hikes

From the AFR this morning: Official interest rates might have to rise soon to contain wage pressures, former Reserve Bank of Australia board member Warwick McKibbin said. While a group of economists including Professor McKibbin and another former RBA board member, Bob Gregory, think the central bank ought to leave its cash rate at 4.25 per

5

Market Morning

Markets had a spate of bad news (European services contracting, Chinese economic growth target shifted) that was barely offset by very good news from the US (service industry expanding) – although Federal Reserve Dallas President Richard Fisher said more bond buying was risky. No milky wilkie? Here’s what happened in detail – remember to read

11

Australian dollar right on support

The risk rally is faltering at the moment and the Australian dollar is feeling the heat. Last week my mate Omid said in his short piece that 1.0665 was the key support. Similarly Rick Spooner over at CMC Markets had this level as the one to watch on the long he suggested. So there is

28

Stock on market rises in major centres

Last week RPData reported that their measure of ‘Stock on Market’ was continuing to see upwards pressure: The number of newly advertised properties for sale increased again last week, the sixth consecutive week they have done so. Although new listings continue to climb to higher levels, the number of homes being added to the market

4

Europe’s recession has barely begun

The reserves from the ECB’s LTRO stage II operation are making their way back into the excess reserve facility at the ECB. The overnight holdings were at an all time record of €820.81bn. As I explained previously, this in itself isn’t a problem. In fact, unless the reserves are moving to some other non-commercial bank

77

The need for billionaire balance

Courtesy of John Hempton at Bronte Capital (that other great Australian business blog): Wayne Swan the Treasurer of Australia (in UK parlance the Chancellor of the Exchequer, in US parlance the Secretary of the Treasury) has been publicly criticizing the new Australian billionaires and their political influence warning that they are a risk to the Australian ethos of

3

Wen Jiabao outlines the future

China’s Premier Wen Jiabao made his annual huge speech of the “Report on the work of the government” (the State of the Union equivalent) earlier today. As always, China likes to make targets. Last year, in the same big speech, he targeted GDP growth of 8% for the year of 2011, which was surpassed, and