China links

Courtesy of Sinocism: Cities get a sinking feeling: report|Society|chinadaily.com.cn A diminishing water table, combined with a growing number of skyscrapers, is causing large areas of China to sink, increasing flood risk and endangering the rail network, according to a survey released recently by the China Geological Survey. The government has already launched a number of measures to

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Macro Morning

Macro Wrap It was a weak dataflow on Friday night, with no US data, but the Germans gave a boost to risk markets, with their closely followed IFO survey showing renewed confidence in the German economy. On reaction European stocks climbed over 1% whilst the US session was subdued, with Apple falling putting a damper


An African iron ore deluge

PhD candidate Luke Hurst of the ANU’s Crawford School of Public Policy has produced new research on the potential impacts of African iron ore on the sea-born iron ore price. I recommend everyone read this paper (find it at the end). It’s solidly argued and a very readable summary of the various arguments put forward


China’s April lending weak?

Caijing reports that sources close to the big 4 Chinese Banks (ICBC, Bank of China, China Construction Bank, and Agricultural Bank of China) suggested that the 4 banks have lost more than RMB1 trillion of deposits, while new loans are not really growing. The hugely positive picture of above expectation new loans in March appears to be


Nomura joins commodity super cycle bears

Various investment banks have been weighing in on whether or not the end of the commodity/ steel/ metal and other super-cycles, which have been led primarily by China’s increasing demand. Credit Suisse has different teams on either side of the debate, and Citi thinks that it’s over.  Now it is Nomura’s turn. Similar to Citi’s argument,


Europe’s lunatics rise

Back in December last year while discussing the ongoing woes of Europe, I suggested that the fiscal compact may never actually be enacted because attempts to do so would have such a disastrous outcome that European nations will inevitably give up. I also mentioned in February that one of the things that could potentially effect any


April 23 links

Morning all – we hope you had a great weekend. Here is what caught our eye and will, we hope, add to your day today. Global macro:  Banking retreat, taking money back home – The Economist IMF gets its massive warchest – WSJ Making Goldilocks happy – iMF Direct Is high public debt harmful for


The story of markets

Discussing the news coverage of the Argentinian president Cristina Fernandez’s nationalisation of YPF, the former state oil firm, I was reminded of why this blog is named Sell On News. The news in much of the mainstream media is a lot of things, but news it is not. The Economist, that last bastion of the


Trading Week – Podcast

So where have the markets gone this week? Past the daily noise and headlines, this weekly post will examine the 10 major macro markets (debt, commodities and currencies) with the Australian investor in mind. This week, instead of the normal chart format, I’ve created and uploaded two videos (10 mins each) to Youtube. Here’s Part


Another look at the Federal Budget

Cross posted with permission from Mark the Graph: Another chart on which it appears that the problems with balancing the Federal Budget are more on the expenditure side than then revenue side when compared with historical levels. Revenue is close to returning to its pre-GFC level of 23 per cent of nominal GDP. If things


Real estate industry positively negative

Cross posted with permission from Capital Appreciation: The latest Property Council of Australia (PCA) – ANZ Property Industry Confidence Survey results indicate that property professional respondents in the ACT were slightly more positive about residential property in the June 2012 quarter but they are generally negative about the overall economy. I’ve highlighted some of the charted results for the ACT


Weekend Links

Stuff Reynard the Fox will be reading about over the weekend. Global macro:  IMF projected to top $400 billion in pledged funds WSJ Missing a bull market is a dismal offense Credit Writedowns Peak oil goes mainstream (again) FTAlphaville How an election in Greece could cause Europe to crumble New Republic, the rise of the the


Trading Day

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. Another very mixed day on Asian share markets, with China markets up, Japanese markets down, but Australia flat.


Down goes Australia’s Terms-of-Trade

Recent trade data coming out of Australia has not been good. In January, Australia’s trade balance moved to a deficit of -$971m, a whopping turnaround of -$2,229 million from December 2011′s trade balance. And then in February, another deficit of -$480 million was recorded – a result that would have been much worse had the


Genworth credit rating under review

Moody’s has just announced that they have put Genworth Financial Mortgage Insurance Australia, one of Australia’s largest mortgage insurers, under review for possible downgrade of their credit rating. The reason for the review was obvious, with the delay of the partial IPO pushed back to 2013 (if at all?) and the announcement of  a first


China’s Achilles Heel

By Leith van Onselen The Economist today published an interesting article about the demographic time bomb that threatens to derail China’s economic development: Over the past 30 years, China’s total fertility rate—the number of children a woman can expect to have during her lifetime—has fallen from 2.6, well above the rate needed to hold a


Boral another victim of housing melt

Boral (BLD) announced to the market this morning a significant cut to its full year profit guidance, with Q1 2012 NPAT (net profit after tax) down to$22 million, due to “a number of variables” – namely weak housing activity in QLD and NSW, but as with Stockland’s (SGP) recent warning, the impact of heavy weather


Fearful Symmetry sees India hurt by hawks

A month ago this chronicle was devoted always exclusively to the Union Budget. There was just enough room for fearful symmetry to indicate that it “will be difficult for the RBI to protest about inflation any longer, allowing for a reversal of the excessive late cycle hikes that got fearful symmetry’s dander up last year.” The appropriate positioning of monetary


CPI previews: weak

Find below a couple of CPI previews from Westpac and CBA. Both predict a headline result of 0.5% for the quarter and an annual rate of 2% with an underlying rate in the mid 2%s. I see no reason to gainsay these calculations. Yesterday’s quarterly NAB Survey showed clear disinflationary pressures in the quarter both


China links

Courtesy of Sinocism: 中国允许银行卖空美元 – FT中文网 中国又出台了一项人民币改革措施。该措施听起来颇为大胆:中国国家外汇管理局(SAFE)宣布,中国小型银行今后将可以持有隔夜人民币多头头寸。此规定意味着,这些银行如今也能持有外汇空头头寸了。一项实行了6年的禁令就此画上了句号。外管局的声明没有解释该规定对大型市场参与者的适用情况,而只是详述了小型银行可以采取的做法,即持有适当的少量多头头寸。但该规定向外界发出了这样的信号:中国当局准备让尚不老练的本土机构承受更大的外汇风险。 China Economic Watch | Can China Reflate the Housing Market? China’s extraordinary real estate boom may finally be over. Multiple indicators suggest that China is on the precipice of a significant market correction. Prices are down in more than half of the 70 cities surveyed by National Bureau


Where Spain and Australia meet

I was going to dicuss some of the goings on in Europe today but I noticed a question on another thread which I thought was important to addesss in the context of both Europe and Australia. I’ll come back to Europe next week as there is a bit to say on Italy’s fiscal slippage along


Turnbull on Dutch disease

Yesterday Malcolm Turnbull delivered a fascinating speech on the exchange rate and Dutch disease. It’s worth a read on a couple of fronts. First, he uses Max Corden’s recent treatise on the subject to argue the need for an SWF. Just to remind you, the Corden line was to run very large Budget surpluses to


Chart of the Day: nuclear power

Today’s chart comes from Reuters and shows the rapid deceleration in nuclear power generation in Japan as the aftermath of the Fukushima tragedy: For reference, here is worldwide electricity production, as reported by the World Nuclear Association, with the following stats: There are now over 440 commercial nuclear power reactors operating in 30 countries, with


Macro Morning

Macro Wrap Debt markets were anxious last night, as the Spanish government sold two tranches of bonds, which turned out to be “successful”. Demand was high, but asking yields were raised to 5.74% for 10 year debt, higher than the January 5.4% average. On reaction European stocks climbed until the US session, when two datasets


Links 20th April: Jinks and Spanish bonds

Stuff Reynard the Fox found interesting today, when he finally got out of his Den. For overview of markets and macro data check out Macro Morning. Global macro:  IMF and China are new best friends FT Alphaville This correlated world – great charts here from HSBC via FT Alphaville explaining risk-on/risk-off Growth in military spending The Economist


Bugs (updated)

Apologies readers for this morning’s late start. We’ve had some bugs overnight and are working on fixing some small problems now. Update We’ve got a server issue which has hit a number of sites. It’s being fixed one bit at a time. The site is obviously up and now running at a decent clip, however,


Trading Day – Telstra is calling

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 very mixed day on Asian share markets, with smattering of green and red everywhere. China markets down,