BHP gets leaner

The miners’ push to become more lean is gaining pace. BHP Billiton has sold its 37% stake in Richards Bay Minerals (RBM) in South Africa to JV partner Rio Tinto for US$1.91 billion. Deutsche describes the price as “impressive”. With China’s economy appearing to weaken and the boom in commodity prices looking shaky, the strategy

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Coking coal falls heavily

We may be seeing the beginnings of a bottom for iron ore but the same can’t yet be said for coking coal. From ANZ: Spot thermal coal fell 2.3% to USD86.37 last week, while coking coal shed 5.4% to USD153.20/t. Coking coal prices continue to drift lower as buyers stay on the sidelines awaiting the results of Q4


First home buyer grants bite the dust

The late-1990s and early-2000s were full of housing policy blunders, which helped fuel the explosion of Australian home prices. In 1999, the Federal Government halved the rate of Capital Gains Tax, which encouraged (in concert with negative gearing) a surge of negatively geared property investment. This blunder was followed by the introduction of the $7,000


Macro Investor Volume 1, Number 11

Health and finance are areas of inquiry with increasingly interrelated terms. This is especially the case in the matter of monetary policy, where liquidity ‘injections’ and central bank ‘life support’, among other things, are in the common lexicon. But when it comes to quantitative easing (i.e. QE) in the US and Britain, or outright monetary


Auction clearance rates dip on low volumes

By Leith van Onselen Auction clearance rates fell slightly over the weekend in Australia’s two major markets, with both states also recording low volumes. In New South Wales, a provisional auction clearance rate of 63% was recorded from 396 auctions reported to the REINSW. This compares to a provisional clearance rate of 64% recorded last


Oz elite skewered on China

By Leith van Onselen Above is a very pointed video interview with Dr John Lee, associate professor at the Centre for International Security Studies, Sydney University, and a non-resident senior scholar at the Hudson Institute in Washington DC. In the interview, Dr Lee outlines the fragility of the Chinese economy, and explains some of the downside


Macro Morning: Risk awwwn

US Non-farm payrolls disappointed on Friday adding only 96,000 jobs against expectations above 120,000 but the markets were in far too ebullient mood to let this disappointment rattle. The fall in the unemployment rate might have helped and the rising expectation that this was the final shove for QE3 helped also. Either way it was


Now it’s back to Europe’s politicians

It’s going to be one of those high volume news weeks for Europe. Obviously the most watched event of the week will be the German constitutional court decision on the legality of the ESM but there is also some other notable events. Mario Draghi’s ECB action plan of last week has opened a new political


An iron ore squeeze

It’s an eye-popping iron ore table today: So, the exuberance of last week finally seized parts of the steel complex with 12 month swaps hitting the proverbial afterburners. Up 9.1% on the day! And who said there’s no speculation in the iron ore markets? Spot followed with a solid climb: Needless to say, with the


China’s August data dump

China’s August data dump arrived yesterday and, on the whole, disappointed again. Inflation in China accelerated slightly from July. China’s consumer price index (CPI) increased by 2.0% yoy in August, up from 1.8% yoy in July, but in-line with consensus estimates. The uptick in inflation was driven by food prices, as one would expect.  Food prices increased by


Links 10th September

Global Macro: ECB’s bond plan draws detractors NYT The rise of inflation nations Andy Xie China, Russia sound the alarm on world economy at APEC Reuters US fiscal cliff endangers world economy, Lagarde tells APEC Bloomberg United States: Economists expect Fed to deliver QE3 and more next week WSJ, Calculated Risk Schedule for the week


Algos and mindlessness

  The much predicted impact of high frequency trading is starting to be felt on the Australian stock market. A program on Background Briefing entitled “Attack of the Algorithms” put the level of algorithmic trading at 40% of the turnover. It is on the way to the 70% that is the level on the NYSE.


Macro Investor this week

This week, Macro Investor Vol 1, No 10 explored the questions surfacing about the mining boom, the terms of trade and Chinese growth, and the growing risk that Australia is negatively re-rated by global markets and the Aussie dollar falls…We looked at a number of short and long trades around iron ore, the dollar and the shifting perceptions


Weekend Links – September 8

Global Macro: Xstrata to fight Glencore’s new bid – Telegraph UK and a slightly cynical look at who else might win from the new bid, Bloomberg If I didn’t have to spread sheet I don’t think I’d have a PC or laptop anymore. Intel uts sales outlook on weak PC demand – Reuters Macro Morning will


ASX Shares Daily – 7th September

By Chris Becker Even with the big returns in Europe and US last night, someone lit a Chinese firecracker under Asian markets today, except our own bourse missed out on most of the gains. The ASX200 was only up 0.3% or 12 points to 4326 points – I’ll take a closer look at the bottom of the post


It’s gold for Europe

By Chris Becker Where do the markets stand now that Super Mario has unleashed the demons of inflation – or is that deflation – with the unlimited bond buying program? Let’s look at some charts from overnight, and some interesting words from probably one of the best macro hedge funds on the planet – I’ll use


Trade deficit worsens

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released trade data for the month of July, with Australia recording a big seasonally-adjusted increase in its trade deficit to -$556 million, from -$227 million in June. May and June’s trade balances were also revised lower, from -$313 million to -644 million (May),


China links

Courtesy of Sinocism. BUSINESS AND ECONOMY Hard Living in Beijing – Economic Observer Online – In-depth and Independent – People coming to Beijing to work and pursue their dreams are increasingly meeting with insurmountable frustration. The slowing economy, rising living costs and government policies that disadvantage residents without a Beijing Hukou are combining to see an


More bad news for coking coal

Courtesy of ANZ Newcastle September coal futures fell 0.2% to USD91.2/t, while spot coking coal is trading at USD160.44/t. The Vice Chairman of the China Chamber of Commerce announced China will remove the 40% export duty on coking coal in line with a WTO ruling. This could be reflecting softer domestic conditions. China is a high-cost swing supplier and has exported


Queensland’s rubbery figures

I mentioned back in June that one the first acts of the new Newman Queensland government was to employ former Liberal federal Treasurer Peter Costello to “audit the books”. I suggested at the time that it was difficult to verify much of the report as it was obviously political in nature and I can only


PCI slides away

The AiG Performance of Construction Index for August is out today and shows further deterioration: Not much surprise here given this accords with ABS and HIA data, especially since it was new orders that drove the dip in all three. I have questioned the efficacy of the engineering component of this index before but it’s


Macro Morning: Markets roar

Draghi delivered on his plan to address the debt crisis overnight which in and of itself is newsworthy given all the false steps and miss starts we have seen over the past year. Stocks, the Euro and the  Australian dollar rallied strongly on the news. The plan, now known as “Outright Market Transactions – OMT”,


Iron ore price stabilising?

It’s all good today! Not much movement overnight in the steel complex but enough to suggest that the big falls are behind us. 12 month swaps are starting to price with some consistency in the mid $90s range: There is also clearly a lift in broader sentiment as Draghi applies his band-aid and although it


Is a Chinese band aid next?

As Barack Obama delivers another impressive speech in America and Mario Draghi in Europe generates another impressive rally through targeted short-term bond purchasing, policy makers in China are seemingly working on some pretty impressive stimulus plans of their own. After months of doom and gloom – some of which has finally caught up here in


China’s infrastructure approval spree continues

Following the approval of 25 urban rail transit projects, the National Development and Reform Commission (NDRC) projects approval spree continues. According to Sina, the NDRC is approving another 20 projects following yesterday’s approval of railway projects, including 13 highway projects with total length of more than 2000 km. On top of that we also see


Chinese banks’ overdue loans spike

The market does not seem to like Chinese banks results.  There are concerns about future profitability, particularly as the structure of recent rate cuts by the PBOC reduced net interest margins going forward. And on top of reduction in margins, as well as slowing loan demand on a weaker economy (among other things), no one seems to