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Property Council’s housing plan reeks of self interest

By Leith van Onselen The Property Council of Australia (PCA) yesterday released its 10-point plan for housing affordability, which is worth critiquing. Below are key extracts from the Media Release: “For twenty years we have had a logjam of costly regulation, poor planning decisions and excessive taxation across all levels of government. This has driven

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Daily iron ore price update (Atlas ironic)

Iron ore price charts for April 26, 2017:    Spot up. Futures down overnight. News flow is whacky:   China’s steel futures climbed to their highest in 2-1/2 weeks on Wednesday amid unconfirmed market talk of production curbs in cities surrounding Beijing ahead of the New Silk Road summit in May. China typically orders industrial plants

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Xi declares Chinese develeraging the priority

Via CCP mouthpiece, Xinhua: President Xi Jinping has called for concrete efforts to maintain China’s financial security. Xi, also general secretary of the Communist Party of China (CPC) Central Committee, made the remarks Tuesday afternoon at a group study attended by members of the Political Bureau of the CPC Central Committee. Financial security is an

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Links 27 April 2017

Global Macro / Markets / Investing: Why do asset prices move? – Philosophy of Money Bitcoin is getting close to its all-time high after the SEC says it will reconsider the Winklevoss ETF – Business Insider There’s a Huge Disagreement Between Bonds and Stocks – Blomberg This Hedge Fund May Be Poised to Create the Most Billionaires – Bloomberg

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Macro Afternoon

by Chris Becker Risk on remains the trade as Aussie markets return to the fold and react relatively positively to a weak CPI print, with government bonds selling off slightly, but stocks rallied. The rest of Asia is also following the positive mood from the US, while commodity prices slip slightly as the USD firmed

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Bear’s lick lips at ASX discounts nuthin’

Iron ore and coking coal futures have held Friday’s gains so far: Which has BHP and RIO  up a little, though FMG and WHC are down: Given RIO has barely corrected since the crash began, let us ask, what is the difference between it and FMG? Given FMG’s great deleveraging, and RIO’s reliance upon iron

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Return of the lonesome dove

From Capital Economics: When taken together with the RBA’s valid concerns that cutting interest rates further would threaten financial stability, today’s data suggest that underlying inflation is now at a level that the RBA will be willing to tolerate. As such, we are no longer expecting the RBA to cut interest rates further. That said,

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Sputtering “bondcano” has another eruption

The infantile “bondcano” just won’t go away: After a brief hiatus, the reflation trade is about to enter stage two, and Aussie investors should stay long this theme, Credit Suisse’s Hasan Tevfik says. …”we forecast reflation to return,” says Mr Tevik, Australian equity strategist at Credit Suisse. “The global macro backdrop remains buoyant with solid

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CPI in detail: inflation pressures well contained

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released the Consumer Price Index (CPI) data for the March quarter 0f 2017, which registered another soft reading for headline inflation, with underlying inflation also remaining well in check. According to the ABS, headline CPI rose by 0.5% in the March quarter, the same

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Yawn: Moody’s warns on bubble, AGAIN does nothing

From Moody’s: Moody’s Investors Service says housing affordability deteriorated on average across Australia over the year to March 2017, a credit negative for Australian residential mortgage backed securities (RMBS). Rising housing prices outstripped the positive effects of lower interest rates and moderate income growth. In the near term, Moody’s expects housing affordability to continue to

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China’s shadow bank crackdown launches interest rate rocket

While the global bond bid continues to firm and interest rate curves to flatten, in one place the precise opposite is happening and fast: China: Money markets have a very similar trend: Some of this is PBOC tightening and some is Fed tightening triggering capital flight. But some, as well, is structural reform, via Bloomie: A

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Aussie voters back negative gearing and CGT curbs

By Leith van Onselen From The Australian comes the latest Newspoll survey, which reveals that a clear majority of voters support reducing tax breaks for housing investors: The Newspoll found that support for tighter rules on property investors cut across party lines, with 52 per cent of Coalition voters backing the changes compared with 57

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Macquarie downgrades banks on fading housing boom

From Macquarie: In this regards, the most indebted 10% of households are at most risk from rate increases. Our analysis below dissects this group by income quintile (i.e., highest 10% of households based on debt-to-income measure split into income quintiles). While a large share of debt (i.e., ~50%) resides within the highest income quintile, when

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Record immigration creates more pain in Auckland

By Leith van Onselen Statistics New Zealand has released its permanent & long-term migration figures for March 2017, which revealed that annual net permanent and long-term migration into New Zealand hit another all-time high 71,932 people: According to Statistics New Zealand, migrant arrivals numbered 129,500 in the March 2017 year, versus departures of 57,600. Visa

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Macro Morning

By Chris Becker   Risk is awnnn as some big US corporate heavyweights post great Q1 earnings and the buzz around Trump’s tax plan reaches fever pitch. The French election fervour is also being pushed aside as European stocks reach new highs and the USD rose against Yen providing a tailwind for Japanese stocks –

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It’s raining mortgage stress!

By Leith van Onselen Digital Finance Analytics’ Martin North has done a great job in highlighting the mortgage stress building across Australia. On Monday, North’s research received extended coverage in the Herald-Sun, whereby some 300,000 Victorian households are already feeling the pain of higher mortgage rates, flat incomes and rising costs of living. On Monday

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Watered-down Boomer housing bribe to be included in Budget

By Leith van Onselen The Turnbull Government’s May 2017 Budget is tipped to include superannuation incentives for retirees as part of its strategy to address housing affordability. The Government is reportedly considering a proposal to give retirees who sell their family home and move to a smaller property an exemption from the $1.6m cap on

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$100 separates Australia from a housing crash, apparently

Via Australian Broker: A staggering 57% of mortgage holders could not handle a $100 increase in their loan repayments, according to new research by Finder.com.au. This additional $100 is equivalent to an interest rate rise of just 0.45% based on the national average mortgage of $360,600. This means the average standard variable rate of 4.83%