Posted by Deus Forex Machina in Australian Shares
on May 17th, 2012 | 4 comments
By Greg McKenna in for Chris Becker
Remember to read “Trading Week“, published Saturday morning, to put these events and ideas in context.
What is it with the ASX 200? After days and days of losses and with Asian markets and US equity futures in their night trade ralling today the poor old Australian Market found itself unable to even hold onto yesterday’s close. Check out this chart below which is the price action on the ASX20o today – not happy Jan.
Putting the broader market into an even harsher light is the fact that BHP was the key driver of the index’s rally...
Posted by Houses and Holes in China Economy
on May 17th, 2012 | 17 comments
Those that read my morning post will perhaps have clicked through to Patrick Chovanec’s blog to read his post on the unravelling Chinese property market. If you are not one of them, find it below, reproduced with the kindly permission of the good Professor!
As a prelude to a broader analysis of China’s GDP, and the accuracy of its official GDP figures, I want to start by examining the national real estate statistics for the first four months of 2012. This discussion feeds into the broader GDP picture, but the property story that has been unfolding is important and interesting enough to be...
Posted by Houses and Holes in Australian Economy
on May 17th, 2012 | 12 comments
Aaaand, here is the other more useful half of today’s inflation expectations survey: what consumers think about job security, which, to be frank, is not pretty.
And does have a habit of leading actual rises in unemployment:
Expectations Bulletin Pack...
Posted by Houses and Holes in Australian Economy
on May 17th, 2012 | 34 comments
Go Wazza!
From The Australian:
AUSTRALIA’S government will have to scrap plans to reverse a $44.4 billion budget deficit in the next fiscal year and the country’s central bank will have to cut rates further as Europe’s economic problems worsen, said an influential former board member of the Reserve Bank of Australia today.
The new Australian budget announced last week “was very badly timed because it is a massive fiscal consolidation”, said Warwick McKibbin.
…”They’re just going to have to completely redo this.”
…Mr McKibbin estimates that...
Posted by Houses and Holes in Australian Economy
on May 17th, 2012 | 22 comments
The ABS has released its Feb quarter Average Weekly Earnings (AWOTE) report today and it shows ongoing solid wage rises across the nation. Better than the market was forecasting too with QoQ growth of 1.1% versus expectations of 1% and YoY growth of 4.4% versus 4.1% expected.
Here’s the long term chart:
That’s still very respectable wage growth and not suggestive at all of a struggling labour market, so this is one for the bulls.
Indeed, the release also contradicted yesterday’s Labour Price release, given it showed WA eased and everywhere else did just fine:
Yesterday’s...
Posted by Houses and Holes in Australian Economy
on May 17th, 2012 | 9 comments
In news that will change absolutely nothing for anyone, anywhere, inflation expectations have eased 2 pips to 3.1%.
The thing that still gets me about this chart is what the frack was “Bubbles” Macfarlane thinking? The pink line is the 50 day moving average. Where was the tough love when it was needed? And bravo to Cap’t Glenn!
Posted by Sinocism in Links
on May 17th, 2012 | 1 comment
Courtesy of Sinocism:
The economic news is getting more negative by the day. On the heels of a cover package in the most recent issue of Caixin (放贷难_财新网) on the problems banks are having making new loans and a Caijing report that New Loans by China’s Big Four Banks Near Zero in Early May, the Wall Street Journal elaborates in China’s Banks Are Ready to Make Loans, but Find Limited Takers. Patrick Chovanec, who is now so bearish (and not without reason) that we may learn his bile is being extracted for a special high-end elixir, wrote a depressing and worrisome blog post in which he...
Posted by Sell on News in Australian Shares
on May 17th, 2012 | 1 comment
Coca Cola Amatil is a discretionary consumer products play, which, given the pessimism of Australian consumers, is to be considered with caution. The company has some scale advantages from its extensive distribution network — it is yet another oligopoly play (which means as much an economy play as a stock value play). The company can introduce new products cheaply, including alcohol and it has some pricing power, which maintina margins. Its operations in Indonesia gove it some geographical diversification. But it is probably fully priced. Brokers are ambivalent, with a...
Posted by Houses and Holes in Commodities
on May 17th, 2012 | 0 comments
Courtesy of ANZ:
ANZ Commodity Daily 625...
Posted by Houses and Holes in Australian Economy
on May 17th, 2012 | 3 comments
From Roy Morgan:
Consumer Confidence is at 115.7pts (up 5.4pts in a week) according to the Roy Morgan Consumer Confidence Rating conducted last weekend (May 12/13, 2012) — the first measure of Consumer Confidence after Treasurer Wayne Swan delivered the Federal Budget last Tuesday and Opposition Leader Tony Abbott’s Budget reply on Thursday. Consumer Confidence is now as it was a year ago, May 14/15, 2011 (115.7).
The rise in Consumer Confidence has been primarily driven by increased confidence about all components of the survey, except there is a small decrease in the number of Australians saying...
Posted by Houses and Holes in Australian Economy
on May 17th, 2012 | 7 comments
You will perhaps be unsurprised to hear that the twin measures of Australian vulnerability both deteriorated overnight. On the housing side of the economy, bank CDS prices rose another 10 pips or so and are clearly at levels associated with closed markets for Australian bank bonds, approaching 190bps:
Gotta love that Budget surplus.
Except, maybe there won’t be one because on the other half of the economy, the iron ore price continued its correction, down 0.6% to $135.10 (white). Shanghai rebar (green) fell roughly the same and is a hair’s breadth from plumbing a new low in its...
Posted by Deus Forex Machina in Markets
on May 17th, 2012 | 2 comments
by Greg McKenna filling in for Chris Becker
Macro Wrap
If you could see my computer screen with all the Bloomberg charts you would get a real sense of just how parlous things are becoming in markets at present. I have 17 markets that I look at all the time including currencies, equities, commodities and bonds covering a period of two years. This longer period enables me to look at the bigger picture rather than just the latest news cycle or headline. What you would see if you could look over my shoulder is the complete capitulation of trends and the rollover in prices since the beginning of May but...
Posted by Houses and Holes in China Economy
on May 17th, 2012 | 64 comments
Perhaps I’m wrong but today it looks to me like China is heading into a hard landing. There are three stories that you must read to make this case. Happily, all three are available at MacroBusiness.
The first is Zarathustra’s description of the monetary pain that is growing in China. It describes the capital outflow and weak credit demand hitting the banks.
The second is by Henry Thornton and describes BHP’s total strategic backflip. Managed under the wondrously Orwellian title of “A well defined strategy”, BHP is moving from mass investment of shareholder funds to mass...
Posted by Zarathustra in China Economy
on May 17th, 2012 | 1 comment
The detailed statistics from China’s April monetary statistics show that the change in the position of forex purchases has turned negative again in April.
With a relatively large trade surplus in April, this indicates that capital flow turned hugely negative. I estimate that excluding the trade surplus, capital outflow would be RMB177 billion (I don’t distinguish the type of flow). As explained in the past, under the current arrangements, a capital outflow will contribute to a tightening of monetary conditions within China. Thus we now know, more or less, the reason for last weekend’s...
Posted by Houses and Holes in Australian Shares
on May 17th, 2012 | 45 comments
Cross posted from Henry Thornton:
In early March of this year, Henry was sufficiently concerned to spend several hours quizzing the man who manages his equity portfolios.
Key assumptions were as follows. The US economy is recovering but not yet strongly; Europe is mired in recession and could yet trigger a major global setback; China is slowing, with some non-trivial chance of a slowdown sufficient to dampen Australia’s mineral boom to an extent that even the mining sector is hit hard and mining stocks take a beating; and the US and other major central banks have flooded the world with...
Posted by Unconventional Economist in Australian Economy
on May 17th, 2012 | 59 comments
By Leith van Onselen
Meet Harry Triguboff. For those who aren’t aware, Mr Triguboff is also known as “High rise Harry” and is the head of Meriton. Meriton is the largest developer of apartments in Australia, with around 50,000 under their name.
In early 2010, Mr Triguboff declared his interest in a “Big Australia” when he commented that he would like to see Australia’s population reach 100 million:
“I don’t think there will be 35 million but about 55 million,” he said on The 7.30 Report.
Without population growth, Mr Triguboff says the economy will...
Posted by Deus Forex Machina in Economics
on May 17th, 2012 | 8 comments
The Great Moderation was a phrase apparently coined by James Stock of Harvard and Mark Watson of Princeton. It was, for those of us who are devotees of Hyman Minsky, simply the precursor to a more volatile period to come. And while not many people on the planet foresaw the Great Recession that we call the GFC in Australia a casual acquaintence with the teachings of Minsky at least prepared us for it.
I have been lucky enough to sit through day to day trading on markets for almost 25 years. Watching markets go up and down, minute charts, quarter hour, hour, 240 minute, day, week and monthly charts on...
Posted by Delusional Economics in Investing
on May 17th, 2012 | 30 comments
I’ve long been fascinated by Indonesia. Since my brother learned the language in high school and took a bus trip to Darwin and a flight onto Yogyakarta sometime in the late 80s. Obviously since then we’ve seen the rise of the bogan traveller to Bali, the horror of radical Islamic-led bali bombings, the soap opera around Schapelle Corby and everything in between. I assume that many of these events are at the front of mind of many Australians when they think of Indonesia which is why the country gets so little economic attention.
What is interesting, however, is that Indonesia is a nation...
Posted by Deus Forex Machina in Links
on May 17th, 2012 | 9 comments
Morning All.
Here is some stuff Reynard the Fox found interesting today.
Global macro:
Buttonwood on the Debt Crisis, “Post-war reflections” - Economist
One chart of why talk of the US dollar’s demise remain pre-emptory – Scott Barber Reuters
Hedge Funds favourite 10 Stocks – insidermonkey
Australia, batting above its self – the ecological footprint of nations – Economist
United States:
US data on housing and industrial production out overnight – Reuters
Facebook is super sizing its IPO – Bloomberg TV
Fed Minutes released overnight - CNN...
Posted by Deus Forex Machina in Australian Shares
on May 16th, 2012 | 39 comments
By Greg McKenna in for Chris Becker
Remember to read “Trading Week“, published Saturday morning, to put these events and ideas in context.
Crash Bang Wallop – a very ugly day in Asia today as the appetite for risk recedes across the globe and investors and traders find the path of least resistance to the down side. The Shanghai B shares fell again today dropping 0.65% with Tokyo off 1.12% while the Hang Seng has made up for yesterday’s surprising rally with a fall of 2.89% as I write.
In Australia the ASX 200 Index fell through that support we highlighted yesterday...
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