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China cuts interest rates on smashed economy

It’s nowhere near enough but it has begun: Chinese banks cut a key interest rate for long-term loans by a record amount, a move that would reduce mortgage costs and may help counter weak loan demand caused by a property slump and Covid lockdowns. The five-year loan prime rate, a reference for home mortgages, was

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165

New Suffragettes obliterate Liberal Party

The angles on this revolutionary election are everywhere: Greens in QLD. TPP on its deathbed. Rise of the people power independents. Labor won with 33% of the vote. Money politics wiped out. Liberal Party decimation and looming annihilation. City versus country. Chinese electorates and the national interest. So on and so forth. But, only a

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Macro Morning

While there was a sea of green across Australian politics on Saturday, Friday night saw Wall Street put in a deep intrasession loss that was then barely filled at the end of the night. This continued high volatility is also translating into a much firmer bond market with the 10 year US Treasury yield again

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Westpac: crashing buyer sentiment pulls house prices lower

Westpac has released its Housing Pulse for May, which declares that Australia’s housing market is now “entering a broad–based correction phase that will be largely shaped by the speed and extent of the interest rate tightening”. Home buyer sentiment has collapsed to its lowest level since the Global Financial Crisis in 2008, with Westpac tipping

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Links 23 May 2022

Global Macro / Markets / Investing: Netflix ‘axes wokest staff’ as profits tank – Daily Mail U.S. House Introduces Bill to Allow Bitcoin in 401(k)s – Crypto Briefing World has just ten weeks’ worth of wheat left after Ukraine war – Telgraph Apocalypse now? The alarming effects of the global food crisis – The Guardian

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Thank god that’s over

The angles on this election are endless and will take time to settle. All I want to add today is the basic relief that Australia has rejected the bottom of the barrel. The Morrison Government was, by any objective measure, a disgrace. It had no behavioral standards, was the most corrupt in modern times, had

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Weekend Sundries: 21-22 May 2022

  Desmodromic ‘A great day on the Albert River fishing. No Barra but got a feed of grunter, black bream and Jack. Burketown was a gem, great digs and people, and a welcome couple of days not having to pitch a tent. I also observed a large-billed heron, a bird species I hadn’t seen previously

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Weekend Reading: 21-22 May 2022

Global Macro / Markets / Investing: The coming food catastrophe – The Economist The banks collapsed in 2008 – and our food system is about to do the same – The Guardian Ukraine invasion could cause global food crisis – BBC Crypto crash leaves El Salvador with no easy exit from crisis – News Trust

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Macro Afternoon

Yet another bounceback with Asian share markets green across the board today to finish the trading week still unsettled. Currency markets are also clawing back more ground against USD as the Australian dollar firms above the 70 level. Oil prices are stabilising with Brent crude now hovering just above the $111USD per barrel level while

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Bill Shorten: Negative immigration behind Australia’s stunning jobs market

Yesterday evening, former Labor leader and shadow minister for the NDIS and government services, Bill Shorten, admitted that Australia’s stunning jobs market – the best in generations – has been driven by the collapse in immigration over the pandemic: Rafael Epstein: We do have a remarkable number today: the lowest unemployment rate since 1974… Do

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Why aren’t Aussie wages rising?

As we know, Australia is enjoying the best labour market in generations with unemployment (3.9%) at its lowest level since 1974 and underemployment (6.1%) tracking at its lowest level since 2008: Australia’s participation rate and employment-to-population ratio are also tracking a whisker below record highs. However, while the labour market is undoubtedly booming, Australian wage

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Bear markets and recessions

Some history of bear markets and recessions from Goldman. —- A recession is not inevitable, but clients constantly ask what to expect from equities in the event of a recession. Our economists estimate a 35% probability that the US economy will enter a recession during the next two years and believe the yield curve is

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Mirvac: immigration reboot to overwhelm housing supply

While all the usual suspects continue to claim that rigid planning and lack of land release is responsible for Australia’s housing shortage, Mirvac CEO Susan Lloyd-Hurwitz basically admitted that this shortage has been caused by excessive levels of immigration, which will worsen as the Big Australia policy is rebooted: “We’re in a genuine national crisis

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It’s raining China growth downgrades

More of them every day now: A slew of economists have cut their forecasts for China’s full-year economic growth in recent days after the country reported worse-than-expected data for April while still signaling that its tough anti-Covid curbs aren’t going anywhere. Standard Chartered Plc and Bloomberg Economics each downgraded their estimates for 2022 on Thursday,

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Labor 57.7% chance of victory

IPSOS: Excluding undecided voters, Labor’s primary vote has fallen two points to 36 per cent, while the Coalition’s first preferences have jumped three points from 32 per cent to 35 per cent. The Greens are on 13 per cent, One Nation 5 per cent, the United Australia Party 3 per cent and others and independents

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Is Labor or the Coalition a better bet for the economy?

Is Labor or the Coalition a better bet for the economy? Fundamentally, the two major political parties share an outlook on the Australian economy. Both prefer a mass immigration-driven economy to the traditional model of advancing productivity. This economic model delivers headline GDP growth, which politicians love to claim is their doing. However, under the bonnet

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Australian dollar pops on stagflation trade

DXY sank last night which is very bad news for the world: AUD dutifully popped: OIl just won’t fall: Metals surged: And miners: EM stocks were not so good: Nor junk: Long bond yields are threatening to stall and fall: But stocks fell anyway: Westpac has the wrap: Event Wrap US existing home sales in April

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Macro Morning

Share markets are still clutching their pearls over “inflation concerns” with European shares playing catchup overnight as Wall Street put in a scratch session with no new news to further spook equity traders. The bond market however saw more firming with the 10 year US Treasury yield pulling back to the 2.77% level, with interest

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Thank immigration collapse for 48-year low unemployment

Yesterday, the Australian Bureau of Statistics (ABS) released labour market data for April, which revealed that Australia’s unemployment rate (3.9%) fell to its lowest level since August 1974, whereas the underemployment rate (6.1%) fell to a fresh 14-year low: While stimulus prevented the economy from sliding into a deep recession, it has merely filled the

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Melbourne and Sydney house prices tumble

CoreLogic’s daily dwelling values index, which measures price changes across the five major capital cities, fell another 0.12% in the week ended 19 May, which follows the 0.11% decline over the prior week: This fall was driven by Sydney (-0.27%) and Melbourne (-0.18%), which more than offset price rises across the other major capitals: So