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Fujitsu skewers, ANZ boosts housing

You’re no doubt more used hearing from Fujitsu about air conditioners. But it’s a little known fact that they run a small financial services consulting unit which today, in conjunction with J.P. Morgan, released a pretty bearish assessment of the prospects for Australian housing. The semi regular Australian Mortgage Industry report concludes: …that the biggest

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10

Brokers split on Stockland

A glimpse of the commercial property market can be seen in what is happening with Stockland. The company cut its FY12 earnings per share guidance by 4.4%, blaming the combination of a recent deterioration in the residential market and wet weather in the Illawarra region of NSW. But it is claiming its commercial property and retirement living businesses are performing

18

RP Data daily house price indices

By Leith van Onselen Please find below the RP Data-Rismark daily house price indices for 28 March 2012: And below are the index values as at the end of February, which you can compare to the above daily movements to get the month-to-date home price movements in each capital and nationally: Finally, for a longer-term

1

China links

Courtesy of Sinocism: China Shows U.S. How to Push for Carbon Capture – Bloomberg – in China, carbon capture marches steadfastly ahead, as an article in the May issue of Bloomberg Markets magazine reports. A pilot project by China Huaneng Group Corp. has been able to remove carbon from coal-plant exhaust for about $39 per ton

46

Sinocism blocked in China

From our alliance partner and provider of daily Chinese links comes this news on the actions of our great and powerful northerly friend: Earlier today Hong Huang recommended the site to her 4.3m Sina Weibo followers. Within a few hours Sinocism was blocked by China’s Great Firewall, the first time I have had any content, let alone

21

Reindustrialization of Europe

Cross-posted with permission from MacroTragedy, a Greek-based macro-analyst who you can also follow on Twitter It certainly is no secret that the west is de-industrializing fast and has been doing so for some time now. This trend has been present since the 1980s. Nonetheless, some countries, did manage to buck this trend and re-industrialized. Now

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Market Morning

There were 2 major data/news/comments that actually moved markets last night, instead of being crutches for financial journalists to hang noise on: the OECD telling the Europeans to bolster their bailout fund, and US consumer confidence at 70.2, below expectations at 70.9 but still elevated. A small Italian debt auction and the release of the

7

The rain in Spain

Back in November last year I posted on my confusion over the jubilation shown by the citizens of Spain as they elected Mariano Rajoy as their new political leader. Mr Rajoy’s strategy during the election campaign was to say very little about what he was actually intending to do to address his country’s financial problems, preferring

7

RP Data weekly house price review

By Leith van Onselen Starting today, I will provide a weekly and month-to-date summary of capital city home price movements as measured by the RP Data-Rismark daily house price index. Two charts are presented: The weekly percentage movements in capital city dwelling prices; and The month-to-date percentage movements in capital city dwelling prices. First, consider

24

How to fix covered bonds

The next installment of working through the detail on how Mega Bank operates and is regulated is how covered bonds work. I have posted on this topic but its well worth revisiting and adding solutions for how both APRA and the RBA both could minimize a very risky situation. Why are they being issued and

4

Buying Asian not Club Med bonds

One of the great regrets of my time as a currency strategist was that even though I travelled extensively around Asia and the world I never got to Jakarta. It was simply the case that the guys at the firm I was at felt the risk assessment wouldn’t allow it. But I’m sure the road

44

The world hangs on US housing

Who’d a thunk it? With China slowing substantially and Europe setting course for perpetual recession, the global economy’s fate this year hangs on the US economy and more particularly, a US housing recovery. Equity markets seem to believe in such an outcome. Respected local strategists like Shane Oliver are on board. Here’s an excerpt from

1

Chart of the Day: Gold ETF

Following from yesterday’s conversation about the direction for gold, today’s chart comes from the most recent weekly commodity report from Standard Bank, available on the Kitco website. A bit of explanation is in order. An ETF – an exchanged traded fund – is a structured product that holds a set of assets like stocks or

54

Links 28th March: Confidence wavers

Markets: Up: USD, Treasuries Flat: CRB, gold Down: Stocks , energies, euro, Aussie Sovereign Yields: 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

5

Trading Day – time for the ASX200?

Trading Day covers the relevant moves in the Asian stock, commodity, debt and currency markets including a review of the top 8 Australian stocks – the top 4 miners and banks, highlighting trading ideas and investment opportunities. Remember to read “Trading Week“, published each Saturday morning, to put these events and ideas in context. Yet

22

Dow doomsayer calls for a downturn

Well, this is a surprise. Beyond the vested calls for lower rates and suffering (i.e lower profits) from the banks, retailers and property developers, we now have captains of industry turning into outright doomsayers. From The (Locked) Cupboard: DOW Chemical’s chief executive today said that he saw signs of a coming downturn in the Australian

28

A bottom in the bullion bubble?

Apart from the nightly 2 second sound bites of how much spot gold has moved – in USD no less – most Australian’s do not watch what is happening in the gold market. Some maybe aware that the price of gold has soared in the recent decade, where the shiny metal has been in a

35

Stockland warns

Australia’s largest residential property developer, Stockland (SGP) “surprised” the market today with an update, announcing that: “..a recent deteriotation in the residential market has impacted its Residential sales, and in addition, prolonged wet weather has results in the deferral of a number of settlements into next financial year. “ SGP has reduced its earnings guidance for

24

Rental vacancies rise 8% YoY

By Leith van Onselen Sorry folks, almost missed SQM Research’s release last week of the capital city rental vacancies data for the month of February: As you can see from the above table, rental vacancies fell by -2,279 (-4.6%) in February, but remained  3,662 (+8.4%) higher than in February 2011. Melbourne, Sydney, Brisbane, Adelaide, Hobart

0

China links

Courtesy of Sinocism:   China to Ban Public Purchases of ‘High-End’ Alcohol, Cigarettes – Bloomberg – yeah right//Chinese Premier Wen Jiabao pledged to ban the use of public funds to buy cigarettes and “high- end” alcohol, warning that corruption may endanger the ruling Communist Party’s survival. China Probes Banker’s Disappearance – WSJ.com – New allegations are emerging

14

RP Data daily house price indices

By Leith van Onselen Please find below the RP Data-Rismark daily house price indices for 27 March 2012: And below are the index values as at the end of February, which you can compare to the above daily movements to get the month-to-date home price movements in each capital and nationally: Finally, for a longer-term

1

Neutral on Premier

It is something of a measure of how much retail is on the nose that Macquarie only has a neutral rating on Premier Investments despite praising it for a “very good cost performance.” Macquarie points out that rental growth has been contained and that margin improvement has generally been well executed. But no business cost-cuts its way to success, and

13

UK first home buyers trapped

By Leith van Onselen The United Kingdom (UK) housing correction has now entered its fourth year. Depending on the indices used (explained here), UK home prices have declined by between -5% and -19% since peak (more in inflation-adjusted terms): However, it’s been a two-speed correction, with London home prices now rising, but much of the

2

The Dinkum Index measures some other economy

So, following on from the press release, find more details from the Fitch Dinkum Index below. First the headline index: Modest Increase in Arrears: Delinquencies in the Australian prime RMBS sector increased to 1.57% in Q411 (from 1.52% in Q311) driven by a rise in the 30-59 day bucket (up 4bp). Arrears have also increased in both

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Fitch: mortgage arrears surge

Fresh from Fitch: Fitch Ratings-Sydney-26 March 2012: Fitch Ratings said that delinquencies in the Australian prime RMBS sector have unexpectedly increased to 1.57% in Q411 from 1.52% in Q311 despite a stable environment in terms of interest rates, economy and unemployment. The increase in Fitch’s Dinkum Index was mainly driven by a rise in the

2

Europe holds back the fire for now

Two weeks ago I wrote a post on Professor Sinn and the growing concern from the German central bank about TARGET2 liabilities. The pressure from the German camp is on-going and late last week it appears they had a win of sorts. The ECB has given the euro zone’s 17 national central banks the power to ban

2

Market Morning

There were three major data/news/comments that moved markets last night. First, a German based expectations index (the IFO) rose, which is a good leading indicator of the powerhouse German economy but was in stark contrast to the weak PMI data of last week. Next, Chancellor Merkel gave hope to a merging of the temporary EFSF

6

Australia dollar: base or ready for a fall?

The Aussie Dollar had a bad week then a great bounce last week. It managed to close above the important support zone in the 1.0370/1.04 region we identified. It sits this morning comfortably atop 1.05 and more than 2 cents above the lows from last week. Tough times for some traders no doubt and one