Daily iron ore price update (Pavlov’s dogs)

Texture from Reuters: Steel output was also curtailed by poor profits at mills. Besides surging iron ore prices that have pressured steel firms this year, analysts also noted that output from electric arc furnaces has been affected by higher scrap steel prices. “The price for steel scrap increased by almost 100 yuan ($14.30) per tonne

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Macro Morning

By Chris Becker  Overnight risk markets are in retracement mode as the USD also falls against all the majors except the commodity proxies as Aussie, Kiwi and Loonie remain subdued. European stocks fell as bond yields dropped everywhere except in Italy, while oil prices are not moving as the latest inventory report surprises with a


CoreLogic weekly house price update: Super Surge

In the week ended 14 November 2019, the CoreLogic 5-city daily dwelling price index, which covers the five major capital city markets, surged another 0.34%: The rise in values was broad-based, but driven by Sydney followed by Melbourne: Quarterly dwelling values continue to rise strongly, driven by Sydney and Melbourne, where prices are rocketing: The


International students plunder ‘regions’ for permanent residency

The Morrison Government’s regional visa incentives, which provides five extra points towards permanent residency and allows international students to stay for up to seven years, has driven a surge in enrolments into Tasmania and South Australia: Data from the International Education Association of Australia shows that student commencements in Tasmania were up by 35 per


Links 15 November 2019

Global Macro / Markets / Investing: Wework loses $1.3 billion against topline of $934M ahead of aborted IPO – Bloomberg Is retirement dying? The old work model is disappearing for boomers, Gen Xers – USA Today Global Economy ‘Breakdown’ Seen Putting More Workers at Risk of Slavery – VOA News Google reportedly offering checking accounts


Macro Afternoon

Stocks are generally down across Asia with only local issues rising due to the fall in the Aussie dollar as the latest unemployment print undershot, sending interest rate expectations down with it. The risk off mood hasn’t been helped by a slip in Chinese industrial production numbers alongside retail sales. Chinese stocks are diverging in


Can Hong Kong anarchy “happen anywhere”

So says the FT: Demonstrators and police officers are experiencing a kind of epiphany when they realise there are no repercussions for smashing the thin veneer of civility. As a consequence, the range of acceptable behaviour has widened dramatically and the most brazen and outrageous actions are becoming normalised. This is fed by social media


Insolvent developers forced into fire sales

Earlier this week, we learned that construction insolvencies are booming, according to ASIC: Insolvencies in the $150bn residential and non-residential construction industry remain at a high level… insolvencies in the three months to September jumped 78 per cent in Victoria, 41 per cent in Queensland and 7 per cent in NSW. This was a significant


Final auction clearance rate holds at 70%

Last weekend, CoreLogic released its preliminary auction clearance rates, which revealed the following results: Today, CoreLogic has released its final auction results, which reported a 1.4% decline in the final national auction clearance rate to 72.0% – well above the same weekend last year (43.3%) and above last week’s 68.0%: As you can see, Sydney’s


Universities required to declare CCP links

Via the AFR: Under sweeping new rules, universities will have to fully disclose who they’re working with on research projects and all financial dealings with other countries and donors, as the federal government demands action against “corrupting” foreign interference. Amid concern about China’s influence in universities that have become heavily financially dependent on foreign students, research projects


More on how far equities can get

More today from the BofAML fundie survey: 1. The bulls are back…global recession concerns vanish and “Fear of Missing Out” prompts wave of optimism and jump in exposure to equities & cyclicals. 2. We say…easy part of rally over, tougher part of rally beginning…but rally it can as no “excess greed” (BofAML Bull & Bear


ABS employment in detail: Fugly

As summarised earlier, the Australian Bureau of Statistics (ABS) today released its labour force report for October, which registered a 19,000 decrease in total employment and an increase in the headline unemployment rate (from 5.2% to 5.3%). In trend terms, the unemployment rate was steady at 5.3%: Again, total employment fell by a seasonally adjusted


MB Fund Podcast: Untangling Australia’s Energy Market with David Leitch

In today’s webinar (Thursday 14th November), hear from MB Fund’s Head of Investment Damien Klassen, Tim Fuller and expert energy analyst David Leitch as they “Untangle the Energy Market.” Topics this week include the death of Coal, if 100% renewable is a viable path for Australian Energy, which energy-based stocks have potential, the viability of


China wins right to develop African Pilbara killer

Via the FT: A Chinese-backed joint venture has secured the rights to develop Simandou, one of the world’s biggest untapped deposits of steelmaking ingredient iron ore. The award to the SMB-Winning consortium, whose investors include Chinese aluminium producer Shandong Weiqiao and the Yantaï Port Group, brings the development of a mine a step closer. Simandou


Graduate employment outcomes worsen

New data released from the federal government shows that graduate employment outcomes have dipped from last year: In 2019, 72.2 per cent of undergraduates were in full-time employment four months after completing their degree, down by 0.7 percentage points from 72.9 per cent in the previous year. The overall employment rate for undergraduates was 86.8


SQM: Housing to boom into bull trap

SQM Research MD Louis Christopher expects growth in housing prices in Australia’s capital cities to average 11% in 2020. The latest edition of Christopher’s Housing Boom and Bust Report forecasts that dwelling prices in Melbourne will rise by up to 15%, while Sydney’s housing market will record growth of 10%-14%. However, Christopher says the housing


Green shoots for the Aussie economy or spreading weeds?

Via Damien Boey at Credit Suisse: The Westpac consumer confidence report for November registered more improvement. After 3 rate cuts, tax cuts, the announcement of first home-buying incentives, and credit easing, consumer confidence was looking particularly dire by October, falling well below neutral levels. It looked very much like consumers were responding to the bad


Sydney water storages face “day zero” as migrants flood in

Sydney’s water storages are plumetting at a faster rate than was experienced during the 2000s Millennial Drought, which was said to be the worst drought in Australia’s recorded history: This has authorities concerned that Sydney could soon face “day zero” – a time when the city runs out of drinking water: Sydney’s water storage levels