26

Trading Week

So where have the markets gone this week? Past the daily noise and headlines, this weekly chart heavy post will examine the major markets (debt, commodities and currencies) with the Australian investor in mind. T’was a wild night on risk markets last night, with a disappointing set of macro data coming out, which validated Houses

Latest posts

30

In praise of equity

The stock market fate of Facebook has focused attention on the state of the public equity markets. Already, the company is being sued for allegedly misleading investors about the state of its business. There is much hand wringing about the problems of being publicly listed — the onerous burden of regulation, the public scrutiny, the

5

Weekend Links

Here is some stuff Reynard the Fox found interesting from a very busy night. What a night too – stocks hammered, gold shoots to the moon alongside bonds. Its’ risk off. WAY OFF. I’ll have some more analysis in Trading Week out shortly this morning. Global Macro: Oil prices tumbles as commodity speculative complex bursts

7

ASX Shares Daily – 1st June

By Chris Becker Remember to read “Trading Week“, published Saturday morning, to put these events and ideas in context. Another interesting session on local markets as we away from month end to a printing avalanche of PMI’s. The ASX200 eventually recovered at the end of the session today, but it still finished in the red, down

55

RP Data May home price indices release

By Leith van Onselen Please find below the RP Data-Rismark press release on May’s -1.4% decline in capital city home prices, which was covered on MacroBusiness yesterday. Below is the summary table showing the monthly, quarterly, and yearly results by region: And here are the charts showing the declines by capital city and nationally: The

0

North Asian manufacturing eases

The PMI’s are in and it’s more subdued news with across the board slumps in the growth rates of North Asia’s manufacturing powerhouses. The other day it was Japan with the best result at a flat reading of 50.7: Today it was China’s official PMI sinking to 50.4 and the HSBC PMI falling to 48.4:

0

China links

C Courtesy of Sinocism: Dealing with a power outage, links only today, apologies. Google Confronts the Great Firewall – By Rebecca MacKinnon | Foreign Policy Appreciate google’s new messaging approach 2 censorship on china search engine, but remember its china share is barely 10%, not big deal now. interesting that Google releases this days after

10

Deposit growth slows

From Banking Day: Household deposits continue to grow at a faster rate than home loans, according to the latest Australian Prudential Regulation Authority banking statistics. This is good news for banks trying to increase the proportion of their funding coming from deposits. Total household deposits grew by 8.3 per cent during the 12 months to

14

Manufacturing leaves the building

This morning the ANZ’s morning note said the following: In Australia today, there are no major data releases. Only the manufacturing PMI. In the US, and just about every other country on earth, the manufacturing PMI is one of the top five data releases for the month. Just sayin’. And so, on to the manufacturing

2

MacroBusiness Morning – 1st June

by Chris Becker and Greg McKenna Macro Wrap We saw a bit of position squaring yesterday for month end after assets like the Aussie dollar made a fresh low for the year before rallying. Likewise in US equities the early weakness gave way to a better performance but by the end of play the pressure

85

Housing bottlenecks do not support prices

By Leith van Onselen Yesterday Bloomberg published one of the more economically egregious stories on housing market dynamics that I have seen in recent times. It argued, using the usual suspects, that housing supply restrictions will prevent falls in Australian house prices: While affordability measures such as household debt and home cost-to-income multiples exceed peaks

4

European money slows to a crawl

European monetary aggregate data from the ECB came out this week and continues to follow the trends we have seen over the last year. The annual growth rate of the broad monetary aggregate M3 decreased to 2.5% in April 2012, from 3.1% in March 2012.1 The three-month average of the annual growth rates of M3

61

QLD’s public service jobs carnage

Yesterday I noticed a story in the AFR about the coming cuts to the South Australian government, obviously on the related news of the state’s downgrade: South Australia’s public sector has come under the knife, with the state’s treasurer axing 1000 jobs over the next three years and delaying a number of infrastructure projects as

3

China re-enters the currency war

Courtesy of Also Spracht Analyst. By now we all know about the burst of the Chinese real estate bubble. We also know that land sales are an important source of local government revenue.  It comes as no surprise, then, that as the real estate market cools and as trouble for real estate developers deepens, one

2

US triple dip fears looming

Sadly, as promised, the US recovery is slowing to its formerly anaemic pace. The data last night was uniformly mangy. First, the final GDP print for the first quarter was revised down to a measly 1.9% annualised: Next, the Chicago PMI for May fell sharply from 56.8 to 52.7, to  its lowest point since the

5

Roy Morgan unemployment tumbles

From Roy Morgan late yesterday: In May 2012 according to Roy Morgan: Unemployment was 8.2% (down 1.1% since April 2012) — an estimated 997,000 Australians were unemployed and looking for work. A further 9% of the workforce* (up 0.8%) were working part-time looking for more work (underemployed) — 1,107,000 Australians. In total 17.2% (down 0.3%)

0

Fearful Symmetry sees a troubled India

Two months ago this chronicle was devoted to the Budget, while the April edition centred on the RBI. This time around Fearful Symmetry is most interested in the parlous state of external financing, which has manifested itself in stark bilateral weakness of the rupee against the US dollar, substantial trade weighted depreciation and a range of troubles in the real

9

Links – Friday 1st June

Here is some stuff Reynard the Fox, and our readers (see comments) found interesting last night. Global Macro: This is your first must read of the day: Why Switzerland is the new China from FT Alphaville. Long, but revealing Indian GDP growth at 5.3% lowest since 2003 BeyondBrics  So that’s the B, the I and the

9

S&P strips SA’s AAA

Late today S&P announced that: Long-Term Rating On South Australia Lowered To ‘AA+’ On Budgetary Pressures, ‘A-1+’ Short-Term Rating Affirmed; Outlook Remains Negative MELBOURNE (Standard & Poor’s) May 31, 2012–Standard & Poor’s Ratings Services said today that it had lowered its long-term rating to ‘AA+’ from ‘AAA’, on the state of South Australia and the

19

Bill Evans calls for another 100bps

So, once again, mainstream economists are catching up to MB. This afternoon, Bill Evans of Westpac, who orignally saw this rate easing cycle constituting 100bps, is now calling for another 100bps. And let’s not forget that Bill Evans has led the pack on this cycle. Bravo I say and about time. His reasoning is as

5

ASX Shares Daily – Bonds Away!

By Chris Becker Remember to read “Trading Week“, published Saturday morning, to put these events and ideas in context. The ASX200 recovered at the end of the session today, but it was doom and gloom all round, finishing down almost 0.5% like yesterday. As I said yesterday, in the short term, there is significant resistance at

34

Gillard talks but can’t walk

From the SMH: Julia Gillard told a dinner hosted by the council last night that Australians deserved to benefit from the mining boom – and that the nation’s resources belonged to its people and not the government or mining companies. ”And here’s the rub. You don’t own the minerals. I don’t own the minerals. Governments

19

Housing credit subdued in April

By Leith van Onselen The Reserve Bank of Australia (RBA) today released credit aggregates data for the month of April, which revealed a continuation of the soft credit conditions prevalent over the past year. According to the RBA: Total credit provided to the private sector by financial intermediaries rose by 0.4 per cent over April

45

Site slowness

Dear readers, No doubt some of you have noticed that in the recent past the MB site has been running slowly at times.  The good news is that this problem is a result of the huge traffic hitting the site, so it’s growing pains for which we apologise! We are working feverishly on a rebuild that

3

Dwelling approvals plumb new lows

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released the Building Approvals data for the month of April. At the national level, the number of dwelling approvals fell by a seasonally adjusted -8.7%% to 10,330, driven predominantly by a -11.1% decrease in approvals for private sector houses. The result significantly undershot