Trading Day

The S&P/ASX 200 Index closed up 113 points or 2.66% to 4255 points in a very positive session coming after a strong rally on US and Euro markets on Friday night. In after hours trading, the index has slipped slightly, but Euro and US markets are pointing to slightly higher opens. Asian markets were also

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CPI previews

Find below a couple of CPI previews from the major banks. Both ANZ and NAB see a subdued CPI print as likely but differ on the implications. ANZ predictd a cut, NAB does not. Strategy Around the Q3 CPI Release[1] CPI Preview Sept 2011


Good news from China

HSBC’s China flash PMI for October resumed growth jumping from 49.9 to 51.1. Just about every component made a turn for the better: This is something of a surprise, though perhaps it should not have been. The turnaround is being led by export orders, probably to the US where the August debt-ceiling shock has clearly


Australian dollar’s critical juncture

As I sit and write this week’s Australian dollar piece I am struck by just what an important juncture we currently sit at. I’ll discuss that a little later, but first I wanted to introduce my new stop light for the Australian dollar on a 3 month, 1 month and 1 week basis. This is


Woodside parts the brokers

Woodside Petroleum is getting the attention of brokers, with raw enthusiasm the general tenor of the analysis. The stock is on a prospective price earnings ratio of 16 times and gross profit margins in excess of 50%, which gives it some buffer against any weakness in energy prices. Gas looks like a pretty strong long


Producer prices clear way for rate cut (updated)

ABS Producer Prices for the September quarter have come in weak: SEPTEMBER KEY POINTS FINAL (STAGE 3) COMMODITIES rose 0.6% in the September quarter 2011. mainly due to rises in the prices received for electricity, gas and water (+8.2%), commercial fishing (+14.1%) and other agriculture (+3.7%). partly offset by falls in the prices received for


APRA spills the beans

Adding to recent RBA speeches, John Laker of APRA gave a speech late last week that parted the curtain on Invisopower! more directly than I have seen before. In his opening address to the Senate Standing Committe on Economics, Mr Laker said: Our assessment is that the Australian banking system is well placed to deal


Chart of the Day: Don’t cry for me Greece

Today’s chart comes from Naked Capitalism, discussing a paper regarding the remarkable recovery of Argentina post its default in December 2001. Following the default, which included removing a currency peg against the USD and subsequent devaluation, there was a severe financial crisis, with huge contraction in GDP – 11% for the year. However real GDP


Europe crawls past its deadline

The European meeting marathon continued over the weekend. Thus far, so far as I can tell, they have decided and/or resolved nothing of any substance while the overall view of the crisis itself has got considerably worse. The Troika’s latest report on Greece’s debt sustainability has been leaked and it showed that they have finally realised


Terms of trade still taking a hit

The Australian’s China correspondent, Michael Sainsbury reckons you should worry about Europe, not China: To read some of the headlines this week about Australia’s biggest export, iron ore, one might have thought the sky was falling. One might have concluded the iron ore worm had suddenly turned, that by far our biggest market, China, had suddenly got


Can offshore buyers save Melbourne property?

Last week’s Melbourne Housing Valuation Report provided extensive evidence of the housing construction boom currently taking place in Melbourne which, in the face of falling population growth, risks tipping the city into oversupply, putting additional downward pressure on both prices and rents. The area that is experiencing the greatest construction boom is inner-city apartments, which


Just how tight is the Budget?

Some peculiar analysis has been circulating about whether the budgeted government fiscal position for 2011-12 is contractionary or expansionary.  For example, Adam Carr remarked last week- …the fiscal balance largely comes from an expected $72 billion lift, or rather surge, in revenues over fiscal 2012 and 2013. It is this jump in revenue that accounts


China’s property conflict

Yesterday we got a few remarks from China’s Premier Wen Jiabao.  According to Mingpao, Premier Wen said that control of food prices remains an important priority, with the usual problems that have been discussed here and there, including his concern on the supply situation, the costs of logistics (note that moving stuff within China can be


October 24 links: Euro delay

Europe to announce Wed. MarketWatch Banks need 108 billion euros. FT EU report blows up austerity. Alphaville Summit despair. Telegraph Leaders blame Italy. FT They must cut debt and boost growth, as well as launch an all out war for world peace! Measuring US pain. Gavyn Davies US data this week. Calculated Risk The end of


Sydney unoccupied

The SMH reports that the 100 or so kids that have occupied Martin Place for eight days in sympathy with the “Occupy Wall Street” protests have been forcibly removed, following the eviction of the Melbourne chapter Friday afternoon. I still don’t think this was necessary and, at least according to the SMH poll, it appears


Marx vs capitalism vs you

It is a measure of how un-self critical modern economics has been, that the Marxists are starting to appear to be making the most sense of the current crises. The supine acceptance that “the market is always right” — a truism only to traders and vested interests — means that there has been precious little


Data vault

Australian Data Motor Vehicle Sales Motor vehicle sales were a little softer in September dropping 1.5%, following their recent bounce back following the supply disruptions courtesy of the Japanese natural disasters which resulted in a gain of nearly 15% over the past three months. The drop in September was largely a result of a 5.6%


Reverse spruiking

  Please find below the latest email reports from the Ray White real estate agent with a particularly pessimistic outlook on the housing market (previous reports are available here, here and here). As always, these reports make interesting reading – both for their summary of domestic and global property-related news flow as well as their


Weekend Links

Up:  energy, Aussie, euro, CCI, metals Down: $US, Treasuries Mixed:  grains Hammered again: ore 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 Year 10 Year


Trading Day: duck and cover

The S&P/ASX 200 Index closed down 3 points to 4141 points in a strange session coming into the EU Meeting this weekend. In after hours trading, the index is up 10 points, with Euro and US markets pointing to slightly higher opens. Before I go on, something happened after “lunch” about 2pm today on the


RPData seeks green shoots in the desert

RPData’s latest newsletter is looking for some green shoots in housing finance but I must admit I am having a bit of difficulty seeing them myself. The charts clearly show finance for existing dwellings has flatlined. A point made here many times and ignored in the MSM in favour of boosterish comments arising from a


Unoccupying Melbourne

I must admit, beyond writing a story about why we might want to carry the Occupy Wall Street banner downunder a few weeks ago, I haven’t shown a lot of interest in the various “Occupy” movements in Australian cities. Not for any particular reason beyond that I assumed, rightly it seems, that any Australian movement


Terms of trade expectations

The ABS today released their International Trade Price Indexes for September.  These figures are not used to produce the official terms of trade measure, but they can be used to generate a very close alternative estimate. Today’s numbers show import prices flat over the Sept quarter, with export prices up 4%.  This is likely to


Moody’s is watching BoQ

As I mentioned last Friday Bank of Queensland’s latest results were a little worrying. It seems that Moody’s agrees and has placed the bank of its watch list: Bank of Queensland’s credit rating has been placed on review for possible downgrade after the bank reported a rise in bad debts. Moody’s yesterday said the deterioration


Mining jobs in context

The Pascometer offers an advertorial today for “Queensland Mining and Gas Jobs Expo” which: …rolls into Caloundra on the Sunshine Coast today with organisers expecting 2000 people to attend.  On Wednesday 10,000 people turned up for the expo’s Gold Coast gig. The patchwork economy is working. Those with longer memories will recall job applicants queueing


IPA carbon fallacies

The IPA, predictably, continues its attack on the pricing of carbon with pieces this week in The Australian and the Australian Financial Review. However, much of the analysis is based on falsehoods that need to be pointed out. Firstly to Tim Wilson’s piece saying that “carbon trading will fail because property rights cannot exist for


Chart of the Day: China GDP composition

Today’s chart comes from EconomPic created from the data and analysis within a recent Michael Pettis newsletter exploring the composition of Chinese GDP, whilst looking at if lower (or negative) interest rates cause higher savings. From 2001 to 2010, consumption has fallen from 45.3% to 33.8% whilst investment has increased from 34.6% of GDP to


Hope from the US?

Last night’s market action may have been worrisome for China (with metals crushed) and frustrating for Europe (going nowhere fast) but US data was excellent. The Philly Fed Index, a guide to manufacturing in the north east, and the same Philly Fed that collapsed in August, rebounded at a record pace, blowing away all market


Europe’s plan to agree on something in the future

Yes, I know I have been warning that the latest European plan would most likely end in something very underwhelming because of the completely incompatible positions of the French, Germans and the ECB.. and yes I know that I warned yesterday that the evidence was mounting that any deal, if it did exist, appeared to


Bogan marketing 101

Editorial note Yes, they’re back. The Bogamonics team. We’ve missed them. Today’s post is an excerpt from their forthcoming book, the great Australian novel, Boganomics. Indeed that’s where our high priests of the mortgage belt have been, penning their masterpiece. I’m sure it was not entirely coincidental that when Boganomics departed in June, MB suffered it’s