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


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


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


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


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


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


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


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


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


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


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


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


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


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


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.


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


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


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


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


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


How will Europe hit Australia?

Macquarie offers a useful macro exercise in running three scenarios for European outcomes and assessing the impact on Australian assets: Scenario 1: Orderly rationalisation of the Euro zone  In this case, we envisage that Euro policymakers will agree on a suite of mechanisms to allow heavily indebted Euro member states to exit the currency union. This


Is the Chinese consumer slowing?

The rebalancing of the Chinese economy will rely on consumers. Certainly, the Chinese government is well aware of the problem, and has put forward policies to encourage spending, but the result is mediocre.  While the share of exports is declining, the share of investment has been surging. Consumers are still not consuming nearly enough.   Now,


Car sales continue a good run

New car sales in October continued there good run, up 1.1% mom and 4.4% yoy. The strength was broad based too. Here are the key figures from the ABS: OCTOBER KEY FIGURES NSW Vic. Qld SA WA Tas.(a) NT(a) ACT(a) Aust. Vehicle sales (no.) Trend 27 545 23 462 18 769 5 651 9 280 1


The begrudging rate cut

The RBA Minutes are out. Find them below with commentary. Financial Markets Developments in Europe were again the dominant influence on financial markets in October. As optimism increased about the prospects for resolving Europe’s current financial problems, many asset prices had recovered from their lows at the time of the previous Board meeting. The announcement


More cuts, more credit

From News today comes the following: Billions of dollars in spending cuts will be announced when the Government releases the latest official assessment of the national economy before Christmas. The reductions will be aimed at bolstering the Government’s determination to deliver a Budget surplus in 2012-13. And it will come in the face of persistent


Europe leads the world down

Overnight the OECD released its Composite Leading Indicators for major economies. The upshot was an accelerated decline in global growth prospects (although the index remains above trend). But what is most interesting is that most of the world is now sinking and without the US, would be already be in deep trouble: It’s pretty obvious


Europe prepares for breakup

Overnight Angela Merkel addressed her party congress calling for an overhaul of the European Union: German Chancellor Angela Merkel called for an overhaul of the European Union, advocating closer political ties and tighter budget rules, in her most explicit prescription for ending the debt crisis. Speaking to her Christian Democratic Union party’s annual congress in the eastern


Chart of the Day: Gold stalls

Like all other risk assets, gold (in USD per ounce) has rallied since the late October low, moving from $1600 to nearly $1800 an ounce. Today’s chart shows a likely repeat of the September rebound move from the August correction in gold, as it hits significant psychological resistance at $1800 USD per ounce: A technical