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Aussie housing values now four-times larger than economy

The ABS yesterday released its property price data for the March quarter, which valued Australia’s dwelling stock owned by households at $7.9 trillion, whereas the total housing stock was valued at $8.3 trillion. As shown below, the ratio of the dwelling stock owned by households against Australian GDP hit a record 4.0 times as at

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Links 16 June 2021

Global Macro / Markets / Investing: Uneven vaccination rates are creating a new economic divide – The Economist The socio-economic consequences of COVID-19 in the Middle East and North Africa – Bruegel Walton Family, World’s Richest, Raises $2.1 Billion From Walmart Holdings – Yahoo Winners and Losers of the Work-From-Home Revolution – The Atlantic Wall

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Macro Afternoon

Asian share markets have diverged with Chinese bourses (except the satellite ASX200) dropping while Japanese stocks are helped along by a much lower Yen as USD continues to strengthen against the major currencies. Gold is struggling after selling off overnight and is barely moving at the $1866USD per ounce level with traders of all sorts

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Business Confidence hits 7-year high

Roy Morgan’s business confidence survey hit a seven year high in May, increasing 4pts (+3.2%) to 129.3 – the highest reading since January 2014 (131.5). This follows a whopping 39.4pts (+43.8%) increase on May 2020 when Australia was gripped by the coronavirus pandemic: Business Confidence in May 2021 was 15.5pts above the long-term average of

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Deloitte: Retail to ride wave of spending

Deloitte Access Economics is upbeat about the outlook for Australian retailers, forecasting that consumer spending will remain strong as the domestic economy continues to rebound and COVID-19 restrictions ease. The firm’s quarterly Retail Forecast report notes that lockdowns and travel restrictions have boosted retailers’ sales, which should result in a “bumper year” for the sector

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Aussie farm visa slaves paid just ‘$9 a day’

Earlier this year, the National Farmers Federation (NFF) called for a Dedicated Agriculture Visa program ease purported chronic labour shortages across the sector: To provide a stable and sustainable workforce for agriculture that is fair and equitable for both workers and employers, the NFF supports the introduction of a Dedicated Agriculture Visa program… providing a

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Productivity not population key to Aussie living standards

Former ALP minister Craig Emerson has penned an article in The AFR calling on the Morrison Government to tackle Australia’s declining productivity growth, which is central to boosting the nation’s living standards: “Productivity growth has contributed 95 per cent of the improvement in Australians’ material living standards since 1901”. “From the turn of the century,

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RBA super dove reaffirmed

Via the RBA Minutes: Considerations for monetary policy In considering the policy decision, members observed that the global economic recovery from the pandemic had continued and the outlook was for strong growth in output in 2021 and the following year. Policy settings and the pace of COVID-19 vaccinations had supported global economic activity, but the recovery remained

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Westpac: Aussie jobs market slowing

Westpac with the note: The ABS Weekly Payrolls estimate of jobs lifted 0.3% in the two weeks to 22nd May and the fortnightly increase of the previous release (for the two weeks ending May 8) was revised from -0.3% to -0.1%. It is normal for Payrolls to be revised upwards in the weeks following the initial

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Adair Turner exposes Treasury’s mass immigration myopia

Over the weekend, The AFR reported that the Morrison Government will use the Australian Treasury’s upcoming intergenerational report (IGR) as ammunition to reboot the mass immigration ‘Big Australia’ policy (see yesterday’s post). The IGR will reportedly “show the country is getting older, more indebted and reliant on taxing younger workers, and driving up spending”. Therefore,

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Macro Morning

The first session of the trading week was a modest one overnight and while tech stocks on the NASDAQ bloomed ever higher, most other equity markets stalled out as bond yields rose across the board. Currency markets were equally sanguine without much intrasession volatiltiy although Yen sold off appreciably against USD while commodity prices saw

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Why “Pig Iron Scott” should boycott iron ore to China

Australia’s personality-disordered PM, Scott Morrison, is galavanting around the world drumming up support to contain China. He’s invited himself to the G7 to lace it with anti-CCP warnings. He’s dropped into Downing Street to spray Beijing. He’s soon off to the White House for an anti-CCP powwow. At home, more US marines and naval access

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Links 15 June 2021

Global Macro / Markets / Investing: The Profit Paradox’ Details How Lack Of Competition Warps Economies – Benzinga Will poorer countries benefit from international tax reform? – The Economist BlackRock isn’t to blame for the dumpster fire housing market – VOX Fed balance sheet tops $8 trillion for first time -data – Reuters US Treasuries

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Macro Morning

With the US inflation report out of the way, Friday night saw the go signs flash green on stock markets while the USD pounced back on no major news against the major currencies, although the latest US Michigan consumer sentiment survey surprised to the upside. Bond yields saw new lows with 10 year Treasuries again

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Auction clearances rebound on Melbourne reopening

CoreLogic’s preliminary report on the weekend’s auctions reported a higher clearance rate as Melbourne reopened. The national preliminary clearance rate rose to 77.4% from 73.5% the prior weekend. However, this was off significantly lower auction volumes, down to 1,426 from the prior weekend’s 2,691, owing to the Queens’s Birthday long weekend. Sydney continued its strong

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Coalition, Treasury collude to reopen immigration floodgates

The Weekend AFR gave its strongest indication yet that the Morrison Government will use Treasury’s upcoming Intergenerational Report (IGR) as ammunition to reopen the mass immigration floodgates: This month’s Intergenerational Report will be “used to reinforce the government’s case to boost immigration once the pandemic ends”. “It will show the country is getting older, more

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Queens Birthday Holiday Links 14 June 2021

Global Macro / Markets / Investing: Standard Inflation Theory Leaves Out Social Conflict and Costs – Ineteconomics Will poorer countries benefit from international tax reform? – The Economist BlackRock isn’t to blame for the dumpster fire housing market – VOX Fed balance sheet tops $8 trillion for first time -data – Reuters Global food prices

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Weekend reading: 12-13 June 2021

Global Macro / Markets / Investing: Global food prices rise to highest level in a decade – Yahoo In a world first, El Salvador makes bitcoin legal tender – Reuters Inflation Is Surging. The Price Of A Toyota Pickup Truck Helps Explain Why – NPR The coming productivity boom – Bruegel Banks to Companies: No

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Macro Afternoon

A fairly mixed end to the trading week here in Asia following last night’s US inflation print and the latest ECB meeting which embiggened US stocks to new highs but hasn’t quite translated into firm moves across other stock markets so far. The USD is losing ground against all of the majors, but particularly Euro

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Aussie university vice chancellors still grossly overpaid

Despite the cut in international students, salaries of university vice-chancellors remain bloated, according to new analysis by Fairfax: Unbelievably, some vice chancellors scored pay rises in 2020 at the same time as revenues tanked, rank and file staff were retrenched or had their wages stolen, and students were pushed into sub-standard online teaching. As shown

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ACCI contradicts itself on Aussie labour market

You have got to love the contradictory statements coming from the Australian Chamber of Commerce and Industry (ACCI), which continues to talk with a forked tongue on the labour market. The ACCI recently sent a submission to the Morrison Government’s migration program review whereby it demanded easier access to foreign workers to ameliorate purported crippling