Latest posts


Stocks to get reverse bull whipped

Michael Wilson of Morgan Stanley has been very good this cycle. Today he picks up on one of my favorite topics, the US teetering inventory mountain. As this greatest ever pile of consumption goods is destocked then over-ordering, over-employment and all manner of supply-side tensions will enter a reverse bullwhip effect and prices plus earnings


Albo signs Australia up to another mega trade bloc

Prime Minister Anthony Albanese has committed to joining the Indo-Pacific Economic Framework for Prosperity, a new 13-nation economic bloc. The alliance has been proposed by US President Joe Biden as an alternative to the 11-nation Trans-Pacific Partnership (TPP). The new economic bloc will include Australia, the US, New Zealand, India, Japan, Indonesia, Malaysia, the Philippines, Singapore,


Daily iron ore price update (boom times?)

The ferrous complex jumped again on May 23, 2022: Clyde Russell is excited: There are still concerns about iron ore shipments from Ukraine, which used to supply about 44 million tonnes a year to the seaborne market, mainly to European buyers. Ukraine was the fourth-largest iron ore exporter, but Kpler data shows shipments plunging to


The property-driven Chinese growth era is over

Waiting for a Chinese rebound is like waiting for Godot these days. It ain’t coming. Things are certainly going to improve from today’s deep recession. Morgan Stanley (though be aware that it loves a good China kowtow): China’s supply chain pressures have peaked: About three weeks have passed since our initial report on the impact


Australian dollar greets Albo with a cheer

DXY was hammered overnight and that reversed all recent trends: AUD up with all things commodities and EM: However, it is still not led by credit which is sign that this is a bear market rally: The Treasury curve steepened: Stocks bounced: Westpac has the wrap: Event Wrap US Chicago Fed national activity survey for April


Aussie post-COVID bounce fades away

The S&P Flash PMI in a marked deceleration. One swallow does not a winter make. — Flash Australia PMI Composite Output Index at 52.5 (Apr: 55.9). 4-month low. Flash Australia Services PMI Activity Index at 53.0 (Apr: 56.1). 4-month low. Flash Australia Manufacturing Output Index at 49.3 (Apr: 54.1). 4-month low. Flash Australia Manufacturing PMI


Macro Morning

More Chinese stimulus news has helped buoy risk taking spirits with a healthy start to the trading week on Wall Street overnight, with European shares also rebounding. The bond market saw some weakness in response, with the 10 year US Treasury yield pushed back up to the 2.8% level, with interest rate markets still continuing


King pin demands permanent residency for international students

With the federal election in the rearview mirror, chief executive of lobby group the International Education Association of Australia, Phil Honeywood, has called on the federal government to make Australia more attractive to international students by fulfilling “the implicit promise of pathways to migration”: A major policy area no political party has dared to address


Sydney’s house price bust gathers steam

CoreLogic’s daily index shows that Sydney is leading Australia’s nascent housing market downturn, record a 1.0% decline in dwelling values over the quarter to be down 1.3% from mid-February’s price peak: Westpac’s latest Housing Pulse shows a “sharp deterioration” across NSW housing indicators, suggesting there is “more to come near term” for Sydney’s house price


Links 24 May 2022

Global Macro / Markets / Investing: A new billionaire has been minted nearly every day during the pandemic – CNN World has 10-week supply of wheat, expert tells UN Security Council: ‘This is seismic’ – Fox 29 Automakers are jacking up prices on electric vehicles to bake in rising materials costs – CNBC Inflation Stings


Macro Afternoon

Asian share markets are quite mixed as we start another trading week, absorbing the very unsettling finish on Wall Street on Friday night. Currency markets are also clawing back more ground against USD as the Australian dollar firms above the 71 level to make a new weekly high. Oil prices are stabilising with Brent crude


Home buyers are still flocking to Queensland

While Sydney’s and Melbourne’s property markets are sliding into the red, Queensland’s continues to rise on the back of strong interstate demand. PropTrack’s Potential Buyers Index, which measures the number of people seriously interested in buying, shows that demand nationally has been trending down since March: But an analysis of the SA3 regions with the


Phew! Opinion polls got it right this time around

Sydney University polling expert Professor Simon Jackman says the performance of pollsters has been “pretty good” in 2022, after getting the outcome of the 2019 federal election wrong. All major national published polls correctly predicted a Labor victory, and their two-party preferred projections were close to the actual voting patterns. Labor has received around 52%


Federal ICAC Labor’s first big test

Labor may need to negotiate with teal independents if it wants to fulfil its pledge of legislating for a national anti-corruption commission by the end of 2022. The teal independents have stated their support for a robust bill put forward by independent MP Helen Haines. Her model for a national integrity commission is based on


Private schools ruthlessly rorted JobKeeper

How did Australia’s elite private schools score hundreds of millions of dollars of JobKeeper dollars without ever ‘shutting down’ and recording giant operating surpluses? From The ABC: For the first time, the ABC can reveal all 395 non-government schools that reported claiming JobKeeper in 2020 and the amounts they received. The ABC has also analysed


Jim Chalmers backs up immigration dump truck

Incoming treasurer Jim Chalmers claims inflation is “almost out of control” and says the business community has “the big role” to play in the post-pandemic recovery, basically mimicking the statements of the Business Council of Australia. He says Labor will help businesses solve their skills shortages and that increasing immigration has to be “part of


ECB is no FED

Nordea with a worthwhile piece. Remember, where the EUR goes, AUD follows. — Risk sentiment remained fragile this week, with equities declining and credit spreads widening. In the Euro area, the risk of a 50bp rate hike has increased, but we are not convinced it will materialise. In the FX space, the GBP remains vulnerable.


US labor market breaking?

Zero Hedge with a vital piece. Be careful of ZH’s excitable editorial style. Nonetheless, it does provide some good evidence that the US labour market is coming off. Most critically, it is entirely possible that COVID and the supply chain panic has led to over-employment which could reverse more quickly than even I anticipate.  —


“Sell the rips”

Michael Hartnett at BofA, conductor of the bust. The jury is still out on the structural story for me but the cyclical is spot on. I still say the Fed does not pivot before oil takes down the commodity complex. That may mean the outperforming ASX has a greater downside risk than other bourses… —


Auction market plumbs new 2022 low

CoreLogic has reported the lowest preliminary auction clearance rate in 2022; albeit based on volumes that we 41% lower due to the federal election. The national preliminary clearance rate slid to 62.9%, down from from last week’s preliminary result of 64.6%, which was revised to 60.1% at final figures. In the same weekend last year,


Daily iron ore price update (rates)

The ferrous complex was strong on May 20, 2022 thanks to the meaningless PBOC rate cut: MYsteel steel real-time indexes tell the tale: Production is down 8% from 2019, about 130mt of iron ore. 100mt of that is accounted for by steel recycling being offline. Global steel output is also down about 5% since then.