For once in its life the RBA sank the Aussie dollar today (after APRA lifted it): Bonds are bid again: XJO is in heaven: Dalian firm: Big miners taking a breather: Big Gas too: Big Gold liked the lower AUD: Big Banks are afire: But Big Realty is getting hit by tech: The Plunge Protection
Cross-posted from The Conversation: Will the banking services royal commission have a lasting effect of improving the banking and financial sector? The answer is “no”. A temporary change is apparent, but the problems lie deeper than those addressed by the royal commissioner. The worldwide pervasiveness of financial sector misconduct is an indication. This is not a
By Leith van Onselen Over recent months we’ve warned how the impending stamp duty bust in Victoria will force the Andrews Government to tighten its belt. Now with the Morrison Government returned unexpectedly, things have gone from bad to worse: Treasurer Tim Pallas now faces the unenviable task of preparing a state budget without almost
Via the Governor: Thank you for the invitation to speak to the Economic Society of Australia. It is very good to be back here in Brisbane today. I would like to begin by providing an update on recent developments in the global and Australian economies. I will then discuss how our thinking on the appropriate
Via S&P: Australian prime home-loan arrears rose in March, according to a recently published report by S&P Global Ratings. The Standard & Poor’s Performance Index (SPIN) for Australian prime mortgages increased to 1.51% in March from 1.48% a month earlier. Arrears are up by 14 basis points year on year. Across the country, arrears movements
Via Bloomie: President Xi Jinping’s visit to a rare earths facility fueled speculation that the strategic materials could be weaponized in China’s tit-for-tat with the U.S. on trade. Shares in JL MAG Rare-Earth Co. surged by their daily limit Monday after state news agency Xinhua said the Chinese president had stopped by the company in
By Leith van Onselen Last weekend’s Federal Election offered another reminder of why Australia’s infrastructure delivery system is busted and badly ill-equipped to keep pace with the federal government’s mass immigration ‘Big Australia’ policy. In the wake of the Coalition’s re-election, the Morrison Government and Victoria’s Andrews Government are locked in a heated battle over
More warnings: Double the spend next time Clive.
Via the RBA: International Economic Conditions Members commenced their discussion of the international economy by observing that global growth had eased in the second half of 2018 and looked to have continued at around this more moderate rate in 2019. Growth in Australia’s major trading partners was also expected to continue at around this slower
Via Cameron Kusher: APRA looks to loosen lending limits – CoreLogic research analyst Cameron Kusher: Earlier today, the Australian Prudential Regulation Authority (APRA) issued a letter to all authorised deposit-taking institutions (ADI) regarding consultation on revisions to prudential practice guide APG 223 residential mortgage lending. While that may not mean very much to readers specifically
Via The Australian: Scott Morrison’s promised tax cuts will be delivered by the 2019-20 financial year, with the Australian Tax Office saying it can pass on the promised changes if Labor agrees to them. There was speculation in other media outlets this morning that the tax cuts would not be passed on as the Prime
Via the AFR: Prime Minister Scott Morrison, who spent the day bunkered in meetings and planning his new cabinet, shot down suggestions that he should adopt policy beyond what he took to the election, including in the energy sector. This is despite calls from business and some in his own party to embrace a more
Fresh from Deep T, MB’s big time banking insider: You have no idea of the smugness of the whole mortgage industry. Brokers won and its back to normal pumping debt. Banks and funders will now pump up the amount of debt on serviceability to unsuspecting borrowers. Not solutions just can kicking to a worse disaster.
Last year it became apparent that Melbourne’s house and land market had become an giant bubble after the median pricefor a housing lot hit $339,000 – up 21% in only 12 months – with steeper rises in the cost per square metre: In August 2018, the panic began to set in with land speculators rushing for the exits: Speculators who
By Leith van Onselen Labor had planned to ban trailing commissions for mortgage brokers from 1 July 2020, so its defeat at the federal election has been welcomed by the mortgage broking sector. The Hayne royal commission had recommended that trailing commissions be abolished and that banks stop paying upfront commissions to brokers. Labor had
By Leith van Onselen Tax cuts announced by the Morrison Government in the April Federal Budget are likely to be delayed until 30 June 2020 because Parliament is unlikely to resume in time to pass the measures. From ABC News: Tax cuts of up to $1,080 per person will likely be delayed for another year
By Leith van Onselen While residents of Sydney and Melbourne are suffering from crush-loaded roads, trains, schools, and hospitals, as well as hideously expensive housing, toll road companies like Transurban are making out like bandits. Earlier this year, ABC News reported that Sydney’s toll road network is the most expensive and extensive in the world:
Shadow Treasurer Chris Bowen has just thrown his hat into the ring to contest Labor’s leadership, turning it into a three horse race between him, Anthony Albanese and Jim Chalmers. From The Australian: The Australian has confirmed Chris Bowen will run as the Right candidate for the Labor leadership… Labor frontbencher Anthony Albanese has brushed
Iron ore prices for May 20, 2019: Spot unchanged. Paper down. Steel stable. Rebar inventories are drawing at the same pace as last year indicating good demand. Iron or port stocks fell more slowly to 131.7mt but more falls are ahead unless Brucutu returns.
And that’s how it long it took for our corrupt system to turn itself around: The Australian Prudential Regulation Authority (APRA) has begun consulting on possible revisions to its guidance on the serviceability assessments that authorised deposit-taking institutions (ADIs) perform on residential mortgage loan applications. In a letter to ADIs issued today, APRA has proposed
I’ve tried my hardest but have failed and the result us upon us, at the AFR: A gas price cut is required for Queensland’s Gibson Island fertiliser plant to avoid closure this year, with owner Incitec Pivot urging the re-elected Morrison Government to ensure gas was ”available and affordable” for Australian manufacturers. Uncertainty over the
DXY eased last night: The Australian dollar was up across the board but faded the election gains: Gold was stable: Oil mixed: Metals fell: And miners: EM stocks look weak: Junk faded: Treasury yields rose: And bunds: Plus Aussie bonds: Stocks sold off moderately and look in jeopardy of more: Westpac has the warp: Event
By Chris Becker US/China trade tensions are spiking again, this time on the hullabaloo around Huawei with tech stocks sinking overnight, dragging down industrials and taking away most of any remaining risk confidence. Interest rate and currency markets were more benign but the USD remains firm across all undollars, with the Australian dollar rolling over post
Via The Australian comes Steve Bannon: Donald Trump’s former chief strategist Steve Bannon says Labor’s Bill Shorten “snatched defeat from the jaws of victory” because he pandered to inner-city elites at the expense of ordinary Australian families. “It’s the little guy who is the backbone of civic society but who is not outspoken … they
The media drivel about the election is as widespread as it is wrong. ScoMo is not a saviour of anything. He lost LNP votes and was fantastically fortunate to regain them through preferences from people voting for change. Moreover he did so by promising to do nothing so what now can he do?. Let’s run
By Leith van Onselen Ivailo Izvorski – Lead Economist, Global Practice Macroeconomics at the World Bank – has penned a ripping article debunking the mainstream view that population ageing spells doom for the world’s economies: Longer and more productive lives should be celebrated as an achievement of mankind rather than considered a problem. Longevity, however,
As regular readers will know, China has been at the forefront of Australia’s international student boom. In the five years to December 2018, the number of international students residing in Australia surged by around 60% to half-a-million, as illustrated in the next chart: The lion’s share of international students studying in Australia comes from China,
Via the UBS property bears: Election result materially reduces downside risk for UBS view on housing The main implication of the election is the absence of expected Labor changes, especially to negative gearing, capital gains tax & franking; rather than the Coalition’s mostly ‘status quo’. While this likely has limited impact on our credit tightening
Global Macro / Markets / Investing: Warren Buffett: If a bank needs a government bailout, the CEO and spouse should lose ‘net worth’ – CNBC Bitcoin loses $21 billion in market cap in 24 hours – CNBC How cryptocurrency Is Changing Basic Economics – The Spec Oil price jumps as Saudi suggests OPEC+ keep production
A mixed session to start the week here in Asia, although dead cat’s are bouncing and rolling over here and there, the local market is soaring due to the pro-bank and pro-mining party getting voted in over the weekend. The Australian dollar is also on a tear post the election, although still remains below 70
