Via Martin North: We ran the latest live Q&A session last night. One highlight was our updated scenarios. With the trade wars in play, the election results, RBA comments and APRA’s latest, the relative weighting for the scenarios have changed. Cash rates have been reduced, and bank losses adjusted. Of course we have yet to
Nobody else is going to say it so I had better. MB and Gerard Minack are the only economic forecasters in the market over the last three years to get the interest rate outlook right. Nobody else saw rates continuing to fall. MB never wavered that the next move would be down. Gerard Minack was
Via Chris Joye today: The widespread media consensus that Prime Minister Scott Morrison has “no agenda” is crap. Most critics do not see the agenda because they are projecting their own political prejudices. ScoMo’s agenda is about empowering individual exertion, aspiration and productivity through lower taxes, smaller government, balanced budgets and investments in infrastructure, education,
Here is the untold story of how Australia saved ANZUS, via Reuters: In early 2018, in a complex of low-rise buildings in the Australian capital, a team of government hackers was engaging in a destructive digital war game. The operatives – agents of the Australian Signals Directorate, the nation’s top-secret eavesdropping agency – had been
Dalian iron ore still marching higher: Via Reuters: Steel mills have been operating at low inventory levels and only purchasing hand-to-mouth from ports due to high raw material prices. Market estimated that average iron ore stocks at mills have fallen to around 20 days of use, down from normal inventory levels of 30 days. Ore
By Leith van Onselen Victorian Premier, Dan Andrews, is under assault on multiple fronts for refusing to allow the Morrison Government to build the controversial East-West Link, which was dumped by Andrews after the 2014 State Election. Federal Treasurer Josh Frydenberg has urged the Victorian Government to approve the East West Link toll road project,
Oh no, at the NYT: The Trump administration is considering limits to a Chinese video surveillance giant’s ability to buy American technology, people familiar with the matter said, the latest attempt to counter Beijing’s global economic ambitions. The move would effectively place the company, Hikvision, on a United States blacklist. It also would mark the
By Leith van Onselen A cabal of speculators that acquired swathes of land on Sydney’s lower north shore, in the anticipation of making a motza once the rezoned for high-rise development, are now sweating on State Government approval. From The Brisbane Times: Developers who have taken a half-billion-dollar gamble on the rezoning of suburban properties
Via Bloomie: Bank of America Corp. sees the Japanese yen strengthening as investors flee risky assets, and has recommended an associated euro-yen trade. Goldman Sachs Group Inc. warns that currencies from the euro to South Africa’s rand and Chile’s peso could be in the firing line. And Westpac Banking Corp. sees bonds as a safe
By Leith van Onselen We already know that Melbourne has experienced insane levels of population growth over the past 14 years, driven by mass immigration: And that the lion’s share of this population growth has taken place in the outer suburbs of the city: Last year, Infrastructure Australia reported that 1.4 million people in the
The Hayne Royal Commission is quickly disappearing in the rear view mirror, with Treasurer Josh Frydenberg meeting with senior APRA officials to craft the government’s response. From SBS News: Mr Frydenberg met with Australian Prudential Regulatory Authority deputy chairs Helen Rowell and John Lonsdale in Sydney, just days after the Morrison government was returned to
Boom! At the ABC: Billionaire apartment developer Harry Triguboff could not hide his delight at the prospect of an interest rate cut in June and the re-elected Morrison Government’s planned help for first home buyers. The Reserve Bank has given its strongest hint yet that interest rates will fall, almost certainly at its June meeting.
By Leith van Onselen The ABS has released data on the value of construction work done for the March quarter of 2019, which registered another 1.9% seasonally-adjusted decline in total construction activity over the quarter and a 6.0% decrease over the year: The result badly missed analysts’ expectations of no change (0.0% growth) in construction
Over the past year there has an ongoing debate about Australia’s little financial crisis. It was the dramatic widening of bank-to-bank funding costs. Coats starting falling as the Hayne Royal Commission wound up. Westpac explained the spread compression then by observing an abundance of cash: Is the lack of a March “turn” a sign of things
Chris Bowen via Domain today: “We need to remind ourselves how to talk to the base, which is not inner city,” Bowen says in an interview. “If you look at the election, wealthy areas swung to us and poorer areas swung away from us. “When you consider our agenda was fairly redistributive, that’s pretty extraordinary.
DEEWR fades away:
Via Matthew Stevens: The fate of Incitec Pivot’s gas-challenged Gibson Island urea plant near Brisbane looms as an early challenge for whomever our returning prime minister, Scott Morrison, gifts with the resources portfolio. …She called out that efforts to secure new gas supplies at a price low enough to re-secure the economics of the company’s
By Leith van Onselen The Property lobby has united in demanding the new Morrison Government introduce a dedicated Minister for Housing. From The AFR: Property developer and Rich Lister Nigel Satterley is leading a powerful industry lobby urging the triumphant Coalition to create a dedicated Federal Housing Minister… [Satterley] said a “full-time housing minister” was
Down she goes, via Westpac: The six month annualised growth rate in the Westpac– Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, declined from –0.13% in March to –0.47% in April. The Index growth rate has been consistently negative over the
Via Asia Times comes Grant Newsham: “Flagpole sitting” was a fad in 1920’s America in which people competed to see who could stay precariously perched longest, with some striking a balance for days or even weeks. When it comes to Australia’s dual relations with the United States and China, one sometimes wonders if the nation
By Leith van Onselen If you want a textbook example of how Australian academia has lost its credibility, look no further than the below analysis from University of Western Sydney Economics Professor Raja Junankar. From Yahoo Finance: One of the main arguments cited for reducing the number of migrants is the amount of overcrowding, congestion
By Leith van Onselen Yesterday, CoreLogic’s daily house price index revealed that Perth dwelling value declines have smashed through 19%: This is by far the biggest bust on record for Perth, with the current 19% decline far eclipsing prior price corrections, both in terms of size and duration: The quarterly pace of decline in Perth
From SQM Research’s weekly newsletter: As a reminder, our forecast for 2019 was as follows: So far the market this year has fallen by another 3.8%. Our base case forecast, released in our 2019 Housing Boom and Bust Report back in November 2018, was for a total 2019 dwelling price fall of between -3% to
Terry McCrann reaches for new lows today: You gotta love APRA’s classic regulatory — “it’s actually up to each bank what margin it decides, except that it must be at least that 2.5 per cent”. …if loan rates fall to 4 per cent in the next couple of months (thank you RBA), then the next borrower
I do believe that Steve Bannon has called it early and right and there is no turning back for the US. Indeed, via the AFR, it is working: More than 40 per cent of American companies in China are looking to relocate following an escalation of the tariff war between Washington and Beijing, according to a
Via New Daily: Tax cuts for the “top end of town” could be waved through Parliament by Labor as it considers putting the Prime Minister under pressure to deliver on his tax cuts and his promised surplus. Labor on Tuesday accused Scott Morrison of his first broken promise over potential delays to planned $1080 tax cuts, and
Iron ore prices for May 21, 2019: Spot up. Paper up. Steel up. Vale down: Brazilian mining company Vale has suspended freight transport on a portion of its Vitoria-Minas railroad as a precautionary measure against the risk of a breach at the Sul Superior tailings dam, which is connected to the closed Gongo Soco iron
By Chris Becker US/China trade tensions are subsiding this time, with US stocks lifting overnight alongside bond yields while the USD remained firm, not withstanding a spike due to the latest OECD Economic Outlook. Commodity prices remain relatively calm during this whole mess although gold is sitting on a monthly low. Yesterday saw Asian stock markets bounce
DXY and CNY were up overnight, EUR down: The Australian dollar held near the lows versus DMs: EM’s continue to outperform it: Gold was stable: Oil too: Metals lifted a little: Miners more so: And EM stocks: US junk was also firm, EM not so much: Treasuries were belted: Bunds too: Aussie bonds held near
Via the AFR: Scott Morrison’s shock win in the federal election may have been delivered by the “battlers” – non-university educated voters in lower income brackets – and Christians. ANU professor Ben Phillips found that electorates with a lower percentage of persons with bachelor degrees and income greater than $100,000, and a higher percentage of
