Housing finance bounces in June

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released housing finance data for the month of June, which registered a seasonally-adjusted 1.3% increase in the number of owner-occupied finance commitments over the month. Arguably, the most important figure in the release is the number of owner-occupied housing finance commitments excluding refinancings,

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China Links

Courtesy of Sinocism Rare-earth mining in China comes at a heavy cost for local villages | Environment | Guardian Weekly Scott Brown Hits China Comparison By Elizabeth Warren, Despite Having Made His Own Silly season Alleged Chinese Mexican meth lord cause problems for Sheldon adelson – Business Insider » Liu Xiang Trips On First Hurdle,


China shares Japan’s ageing population risks

By Leith van Onselen A couple of weeks ago I published an article, China will grow old before it gets rich, which questioned whether China’s rapid economic development could continue in the face of a rapidly ageing population as the “One Child Policy” comes back to bite. This article contained numerous comparisons with Japan’s economy,


At what price does the RBA intervene in the Australian dollar?

FT Alphaville last night wrote the following: But the strength of the dollar is still a cause for concern, even, it seems, for the RBA. Following Tuesday’s decision to leave the official cash rate on hold at 3.5 per cent, it noted the exchange rate had “remained high, despite the observed decline in the terms of trade and


Macro Morning – Investors pile in

It is no understatement to say that the data out of Europe and the US was on the weak side last night yet we are confronted with a sea of green – positive performances across the stock and commodity markets. It would be a reasonable question to ask how that could be but the simple


Ore bounces along the bottom

Iron ore remains impressively weak. In the past, when the price has fallen swiftly it has to rebound just as quickly. There is no sign of that so far in this round of weakness. Here’s yesterday’s prices: And charts: Chinese steel is still falling: And the coastal bulk shipping rallies have stalled for now: There is


Is gold-plating of electricity infrastructure an issue?

With today’s sudden media focus on the “gold plating” of electricity infrastructure driving excessive retail price rises, it seems the Federal Labor government has finally woken up and read its own carbon policy blueprint. From the Garnaut Review: There is a pressing need to revisit the state-owned distributors. There is an unfortunate confluence of incentives


China’s leading indicator slides on

Courtesy of Also Sprach Analyst: We will soon get a glimpse of how the Chinese economy was doing in July and to see if it has indeed reached a bottom as most are hoping for. There are, of course, reasons to be both optimistic and pessimistic about the bottoming.  As the Chinese government has elevated growth to


Pettis: The Chinese rebound will be short

Exclusively from Michael Pettis’ newsletter: While analysts are still arguing over whether or not growth in the first half of 2012 was lower than the already-low reported numbers (I think it was, and for reasons see Kate Mackenzie’s quick summary in the Financial Times), I expect, as I discussed in the previous issue of this newsletter, that over


Bradken, Leighton, Credit Corp, Codan, Cochlear

By Chris Becker Yesterday was day one for earnings, and we’ve had quite a few surprises and non-surprises with announcements. First off the rank was Bradken (BKN), a major supplier and manufacturing of mining equipment, surprising estimates by posting a 49% leap in profit for the year. The stock lifted off on the result, closing up over


Indonesia’s risky rise

Back in May I wrote a small post on Indonesia in which I highlighted that our much forgotten northern neighbour was growing strongly and although there were significant risks in the endeavour it was probably worth taking a second look at the country. This week Indonesia once again reported that it was grow strongly: Indonesia’s economy


Links 8th August

Global Macro: Convertibility risk: Acknowledged by not addressed Yanis Varoufakis Gross to Investors: Stay away from Europe CNBC Taiwan’s July exports: dismal BeyondBrics German factory orders fall twice as much as forecast Bloomberg Rice hoard offers world respite as food costs surge Bloomberg United States Housing inventory down 23% YoY in August Calculated Risk Weekly


ASX Shares Daily – 7th August

By Chris Becker These daily updates need to be placed in context with the longer trends and drivers amidst the overall technical picture, so head to Macro Investor for a free trial. Former “Trading Week” readers will find it reborn as “Technicals“, published 8.30am each Monday morning. Another fun, almost green day across the board as the


Economists on rates

Some bank economist rate takes for you: Bill Evan’s at Westpac: As we expected the Board of the Reserve Bank decided to leave the cash rate unchanged at 3.5%. There were some subtle changes in the wording around some of the risks to the outlook but nothing that would indicate a material change in the Bank’s ‘wait and


Opposition seeks to boost investment elsewhere

Does the Opposition even understand macro economics? From the AFR today: The federal opposition has signalled it opposes the Reserve Bank of Australia intervening in currency markets to weaken the dollar, preferring to let market forces determine its value. Former RBA board member Warwick McKibbin wrote in yesterday’s Australian Financial Review that the central bank should consider printing


China Links

Courtesy of Sinocism Li Peng is latest party veteran to bask in spotlight | SCMP.com Following re-emergence of Jiang Zemin, People’s Daily article praises ex-premier ahead of reshuffle 广六条倒逼电视剧减产 影视网络版权价格大跌_互联网_DoNews-IT门户-移动互联网新闻-电子商务新闻-游戏新闻-风险投资新闻-IT社交网络社区 Chas Freeman on Why People Say ‘Beizhing’ – James Fallows – The Atlantic China Vanke First-Half Profit Gains 25% After Price Cuts – Bloomberg China


PCI: Construction funk deepens

Here’s the July PCI, about which I have previously expressed doubts whether it is correctly measuring engineering work. Anyways, even if biased towards dwelling construction, it kicked downwards in July: And employment sank to its lowest level in the past few years: Binder 1


RP Data: Housing recovery “precariously balanced”

By Leith van Onselen Following July’s increase in the RP Data-Rismark home values index, RP Data’s Cameron Kusher has provided sensible commentary arguing that the housing market is “precariously balanced” and that it is probably too early to call a bottom: The results for June and July 2012 have been quite strong with capital city


Markets giving up on rate cuts

The RBA meeting today is a no brainer. No cut: More interesting, markets are now pricing out future cuts at a rapid pace. A few short weeks ago, the Credit Suisse rate cut index was pricing five cuts in the next twelve months. Now it’s down to two: I remain convinced that the next move


Large retailers still feeling the pinch

By Leith van Onselen The contradictory signs coming out of the retail sector have continued, with last week’s release of strong retail trade data by the Australian Bureau of Statistics (ABS) contradicted by reports of falling profitability and sales amongst Australia’s large retailers. Last week’s ABS figures revealed that retail sales grew by 1.0% over


Macro Morning – Draghi’s afterglow continues

A quiet night in terms of data saw a continuation of the afterglow of Friday’s reappraisal of Draghi’s success in isolating the Bundesbank. In Europe bonds rallied again and equities got a lift. In the US stocks closed at 3 month highs but a large part of the gain was given up in the last


Are Chinese profit warnings signalling a bottom?

Recently, Hong Kong-listed companies (many of which are Chinese companies) have issued profit warnings at a record pace.  There is little doubt that many of these companies are facing an environment which, to them, is probably not much different from a hard landing. Although I am not at all optimistic about China’s economy over the medium term (as


Links 7th August

Global Macro: The economic crisis will solve itself, climate change won’t. Financial Times. I agree. July “was the only month in the last 400 in which European stocks, the German 10-year bund and gold rallied by more than 2.5%.” BCA Research via Buttonwood But with Draghi keeping his powder dry, is Europe turning Japanese? Economist


ASX Shares Daily – 6th August

By Chris Becker These daily updates need to be placed in context with the longer trends and drivers amidst the overall technical picture, so head to Macro Investor for a free trial. Former “Trading Week” readers will find it reborn as “Technicals“, published 8.30am each Monday morning. Now that was a fun day! Green, green across the


Coking coal crunched again

Friday saw a little more downward pressure on the iron ore price but coking coal was smacked for another 5% last week: Newc spot bounced last week adding 3.5% to USD85.65/t, while coking coal continued its decline falling 5.5% to USD182.27/t. Although prices at the premium end of the thermal coal spectrum gained ground, a succession of utility tender