Daily iron ore price update (Indian export pressure)

by Chris Becker Spot iron ore prices continued their New Year rally while long dated futures markets moderated as the restocking meme continued apace: Meanwhile the Indian iron ore industry is desperate for their government to remove export duties as they find they can’t compete with the Chinese cheap market: It complains that iron ore

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“Demand management” won’t solve Sydney’s water crisis

Sydney’s water storages continue to plunge at an alarming rate that makes the Millennium Drought look like child’s play: This has prompted the Berejiklian Government to fast-track an expansion of Sydney’s desalination plant, doubling its size in order to provide more than 30% of Sydney’s drinking water: NSW Water Minister Melinda Pavey… said the expansion


NDIS fuels bedpan jobs boom

The November quarter employment data from the Australian Bureau of Statistics (ABS) reveals that spending on the National Disability Insurance Scheme (NDIS) continues to fuel jobs growth in the Health care and social assistance industry. In the year to September 2019, growth in Government Final Consumption Expenditure (GFCE) surged by 6.0% – the highest since


Australia’s international student slave trade

In recent years, Nepal has emerged as Australia’s third largest source market for international students. As shown in the next chart, the number of Nepalese students enrolled across Australian international education institutions ballooned from just under 12,000 in 2013 to 62,000 currently: Over the same time period, ‘exports’ from Nepalese international students – comprising both


Links 9 January 2019

Global Macro / Markets / Investing: Bitcoin showed higher returns than both the S&P 500 and gold in 2019 – Sfox The Concept of a U.S Dollar Collapse Goes Mainstream – Traders Magazine Market Madness: How the S&P made its 10-year comeback – OC Register Repo Panic Returns As Fed Injects $99BN In Liquidity, Including


Macro Afternoon

Well it’s been an interesting day to say the least here in Asia for risk markets with the Iranian attack on US bases in Iraq dominating the news and sentiment. Gold spiked above the $1600USD per ounce level alongside Bitcoin and other safe haven assets, setting of a chain of cash spilling out of stocks


SUVs defy new car sales bust

This week’s new car sales figures for 2019 from the Federal Chamber of Automotive Industries (FCAI) reported a disastrous 7.8% annual decline in sales compared to the 2018 calendar year, with annual sales also 11.5% lower than their March 2018 peak: In fact, the last time annual new car sales were at this level was


ABS job vacancies give false hope

The Australian Bureau of Statistics (ABS) has released job vacancies data for the November quarter, which recorded a 1.7% seasonally adjusted rise in the number of vacancies over the quarter but a 0.4% decrease in trend terms: Over the year, job vacancies fell by 0.9% in seasonally adjusted terms and by 2.3% in trend terms.


Dwelling approvals post strong rebound

The Australian Bureau of Statistics (ABS) has released dwelling approvals data for the month of November. At the national level, the number of dwelling approvals surged by a seasonally adjusted 11.8% to 14,675. The overall lift in approvals was broad-based, with both units & apartments (+22.6%) and houses (+6.1%) rising. However, in the year to


Wealthy home owners devour Aged Pension welfare

Late last year, The Australian’s Adam Creighton labelled the Aged Pension “an economically costly inheritance preservation scheme” given its largesse towards wealthy home owning retirees. This claim came about after it was revealed by Creighton that elderly Australians living in $1m-plus homes are claiming $6.3 billion in pension payments: Retirees living in $1m-plus homes are


Construction PMI crashes to 6 1/2 year low

The Australian Industry Group/Housing Industry Association Australian Performance of Construction Index fell a further 1.1 points to 38.9 in December, with deteriorating indices for activity, new orders and supplier deliveries contributing to the lowest Australian PCI® result in six and a half years (readings below 50 indicate contraction in activity, with the distance from 50


Iran hits back and attacks US base in Iraq

by Chris Becker And so it begins. Via AP: Iranian state TV says Tehran has launched “tens” of surface-to-surface missiles at Iraq’s Ain Assad air base housing U.S. troops in response to the killing of top Iranian military commander Qassem Soleimani. It was not immediately clear whether the purported missile strikes struck the base or whether any


Melbourne is already Australia’s biggest city

The AFR reported that Melbourne’s population is projected to overtake Sydney’s population by 2026: Higher growth is being driven by rising birth rates, strong international migration and people moving from interstate and regional hubs, pushing Melbourne’s and Sydney’s populations to about 6 million by mid-2026. But Melbourne’s population will pass Sydney’s by the end of


Australian dollar crashes below 69 US cents

by Chris Becker Not a good night for Australian dollar bulls with the Pacific Peso kicked down below 69 cents against the USD in what at first glance looks like a technical move: The risk proxy AUDNZD pair was also hit hard, moving to a new monthly low, surpassing the July 2019 terminus: Looking at


Property listings collapsed in December

SQM Research has released its Stock on Market report for December, which reports a massive 14.8% slump in property listings nationally over the month as well as a 12.0% decline over the year: As shown above, all capital city markets experienced big falls in property listings. Seasonality would obviously have played a big role in


Macro Morning

By Chris Becker  Risk markets continue to stumble around in the new year with the latest US economic data surprising slightly to the upside, pushing the USD higher against almost everything, but in particular the Australian dollar which crashed to a monthly low. Tensions over Iran have almost dissipated – the calm before the storm


Daily iron ore price update (forecasts bloom)

by Chris Becker The iron ore price complex had a slight breather yesterday as spot prices lifted slightly alongside futures as the major steelmaking city Tangshan lifted its second-level smog alert, helping boost demand as controls are eased. The stupidly composed Department of Industry, Innovation and Science recently released its forecasts (dart boards size not


Aussie households are furiously repaying debt

The latest credit data from the Reserve Bank of Australia (RBA) revealed that both personal and mortgage credit growth has tanked, with personal loan growth declining by 4.9% in the year to November 2019 and mortgage growth falling to just 2.9% – the lowest level in recorded history: The decline in mortgage credit growth comes


Construction jobs get stay of execution

Throughout much of 2019, MB warned that Australia’s construction industry was facing heavy job losses. For example, we wrote the following in our Christmas Special Report, released last month: The biggest single downside risk to the Australian economy is the downturn in construction activity. Gross fixed capital formation (GFCF), basically net investment, was already falling


Links 8 January 2020

Global Macro/Investing/Climate Change: Shutdown of Coal-Fired Plants in U.S. Saves Lives and Improves Crop Yields. Research found that between 2005 and 2016, the shutdown of coal-fired units saved an estimated 26,610 lives and 570 million bushels of corn, soybeans and wheat in their immediate vicinities  – UCSD The Fed Should Keep Looking Forward, Not Retreat


Macro Afternoon

There’s a more positive mood across Asia today due to Wall Street brushing aside any concerns about WW3 overnight, as the USD holds firmer across the board. The long wait to the February RBA meeting is seeing probability of a cut rising in the wake of poor macro data and the upcoming slashing of the


Car sales tumble in 2019

by Chris Becker Car sales in 2019 dipped nearly 8% year on year according to the Federal Chamber of Automotive Industries, with just over 1 million new vehicles sold. Some details via VFACTS: The data shows that SUVs accounted for 45.5 per cent market share, up from 43 per cent in 2018. Passenger cars managed


Macro Morning

By Chris Becker  Risk markets remained cautious overnight in response to the ongoing US/Iranian tensions with European stocks dropping before a late rally on Wall Street saw Treasury yields rise as the mood improved. Gold held on to its big breakout while oil prices moderated only slightly. The USD rose against Yen in the risk-on


Links 7 January 2020

  Global Macro/Investing/Climate Change: The United States’ main allies are abandoning Trump over his ‘dangerous escalation’ with Iran – BI Oil surges again after Trump threatens Iraq sanctions, Iran retaliation – Reuters Climate crisis fuels year of record temperatures in UK, says Met Office | Summer and winter records tumble in 2019 – The Guardian


Macro Afternoon

There’s a lot to digest for risk markets starting the trading week here in Asia with the return of Japanese traders to their desks adding to the volatility. Gold got an awesome bid in the morning, gapping some $20 higher to a near seven year high, as other risk proxies and safe havens reacted to