Latest posts

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CoreLogic weekly house price update: fall

In the week ended 14 May 2020, the CoreLogic 5-city daily dwelling price index, which covers the five major capital city markets, fell by 0.02%: Movements were mixed across the major jurisdictions: Over the first two weeks of March, dwelling values have basically flatlined at the 5-city level: Quarterly dwelling values continue to rise, driven

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Links 15 May 2020

Global Macro / Markets / Investing: Experts’ best ideas on how to beat Covid-19 and save the economy – Vox IMF warns of further drop in global growth due to Covid-19 – The Guardian International Energy Agency Forecasts The Biggest Decline In Electricity Consumption Since The Great Depression – Stock Market News Global Economic Downturn

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Macro Afternoon

Selling is the order of the day here in Asia with all stock markets lower by 1% or more in response to the selloff on Wall Street overnight, as traders weigh up more negativity around the “V” shaped recovery post-coronavirus. The USD is gaining against everything by safe haven Yen, with the Aussie dollar dropping

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NZ immigration hits record high as Kiwis rush home

From Statistics New Zealand: Annual migrant arrivals of New Zealand citizens are provisionally estimated at 42,800 for the year ended March 2020, with almost half of these arriving between December 2019 and March 2020. This is the highest annual number on record… Annual migrant departures of New Zealand citizens are provisionally estimated at 35,700 for

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The battle to lift the yield curve

Via the excellent Damien Boey at Credit Suisse: Real yield curve model points to steepening, but … We define the Australian real yield curve as the 10-year inflation-indexed bond yield minus the real 3-month interbank rate, using the inflation swaps curve to profile long- and short-term inflation expectations. Our proprietary model of the real yield curve

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Industry superannuation funds spin web of lies

After vigorously attacking the Morrison Government’s early superannuation release policy, Industry Super Australia (ISA) was accused of exaggerating the impact of this scheme on younger Australians’ retirement savings. Specifically, ISA ran an advertising campaign claiming that a 30 year old worker could lose up to $100,000 in retirement savings if they withdrew $20,000 from their

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Final auction clearance rate rebounds to 60%

CoreLogic has released the final auction clearance rate for last weekend, which recovered to 59.9% from 47.5% the week prior; albeit off weak volumes: According to CoreLogic: The capital city final auction clearance rate came in at 59.9% last week, the highest final result we’ve seen since Mid-March. The improved clearance rate was across a

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Employment group demands JobKeeper extension

Australian Industry Group CEO Innes Willox believes the $130 billion JobKeeper scheme must run its full course, and it should be extended beyond the current end date of 27 September if necessary. He has also cautioned against any move to reduce the amount of the wage subsidy, which is currently $1,500 per fortnight: “Consideration should

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Huge migrant wage theft uncovered in SA

Via the ABC: South Australia’s largest private employer, convenience store chain OTR, has been accused of wage theft that could amount to $70 million in underpayments to thousands of employees. A class action on behalf of 1,050 workers against Shahin Enterprises, owner of the chain also known as On The Run, has been lodged with

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Inside Australia’s jobs bloodbath

As summarised earlier, the Australian Bureau of Statistics (ABS) today released its labour force report for April, which registered an unprecedented 594,300 decrease in total employment but only a 1% rise in the headline unemployment rate (from 5.5% to 6.2%) due to a collapse in the participation rate: Again, total employment collapsed by a seasonally

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UBS: Banks need much more capital

Via the excellent Jonathon Mott at UBS: Results were all about the Balance Sheet. P&L takes the back-seat 1H20 reporting season was disappointing, in our view. Although sector NPAT fell 45%, the focus was on capital and provisioning build as the banks prepare for a recession. COVID-19 overlays were at the lower end of expectations,

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Dan’s West Gate Tunnel in tatters

Earlier this month, the Victorian government advised that the $6.7 billion West Gate Tunnel project would not be completed in 2022 as originally intended, instead pushing the project back to 2023 over a dispute around the disposal of contaminated soil, Hundreds of workers on the project are now facing the sack amid landfill cost increases:

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Has the Fed killed negative interest rates?

Via the excellent Damien Boey at Credit Suisse: Fed Chair Powell guides negatively. In an ad hoc speech, Fed Chair Powell said that the economy faces unprecedented risks from COVID-19 if fiscal and monetary policy makers do not step up to the challenge. He suggested that the recovery could take time to gather momentum, and that the present liquidity

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Mass immigration and globalisation are not the same

Big Australia booster, Jessica Irvine, has penned another strawman article to attack calls to lower Australia’s immigration intake back to historical norms: Already we hear voices calling for caps on migration and reinstating domestic industries. It’s up to politicians to remind us why we should not give in to fear-mongering and turn inwards as a

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Previewing Aussie jobs

Thanks to Westpac: Change in total employment: March +5.9k, WBC f/c: –450k, Mkt f/c: -550k Range: –125k to –1,000k The timing of the labour force survey – covering the first two weeks of the month – meant the March update did not capture the impact of broad based lockdowns implemented late in the month. That

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Tepper: It’s a tech bubble

Via the AFR: Appaloosa Management’s David Tepper sounded a strong note of pessimism on the state of the stock market, calling it the most overvalued ever outside of the bubble of 1999. Valuations on some individual stocks on the Nasdaq are “nuts,” Tepper told CNBC on Wednesday. “People have to be very careful about some

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CBA: Mortgage volumes holding up

From Banking Day: Weekly application volumes trended lower over March, April and May “relative to the peak volumes experienced in February,” Commonwealth Bank said in a trading update yesterday. On the other hand the bank said “application volumes remain strong and are around 10 per cent higher than the same period last year,” perhaps confounding

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New home sales collapse

From The HIA: “New home sales have fallen by 22.8 per cent since the introduction on COVID-19 restrictions,” stated HIA’s Chief Economist, Tim Reardon. “In March, new home sales fell to their lowest level on record and they fell further in April. “In parallel, the number of cancellations of projects now exceeds 30 per cent

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WHO: Coronavirus here forever now

Thanks, Xi Jinping: The coronavirus that causes COVID-19 could become endemic like HIV, the World Health Organization said on Wednesday, warning against any attempt to predict how long it would keep circulating and calling for a “massive effort” to counter it. “It is important to put this on the table: this virus may become just

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Macro Morning

  By Chris Becker  Another sour night on overseas markets with Federal Reserve Chair Powell giving a reality check on the economic impact of COVID-19, causing a selloff across Wall Street as Chinese/US relations also took a dive. Currencies also bore the brunt of the volatility, although gold stayed true and fair to remain above

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Daily iron ore price update (strong)

Iron ore prices for May 13, 2020: I see this latest strong price action as a combination of restocking, exaggerated by Brazil worries, and strong seasonality. The last will reverse into June but the former will last as long as the virus threatens supply. Capital Economics high-frequency indexes look better today too: The major pulse