43

Website improvements

Hi all, A quick note to offer guidance on the new website. As well as the layout changes that make it easier to access content for new readers, it comes with a dramatically improved sign-up and resubscription process, greatly enhanced speed, and a much better mobile experience (since 95% of traffic is now phone!). The

Latest posts

0

Australian dollar tarrifed again

DXY is back. EUR is unravelling. Could be tactical. AUD follows EUR. Lead boots getting heavier. Stupid Trump has revived oil with Venezuela and Iran alk. Copper bubble begins. Helping RIO. EM meh. Junk stressy. Yields up with oil. Stocks plunged. The Australian dollar has once again been tariffed. President Donald Trump signed a proclamation

0

Housing industry ignores number one crisis solution

The Housing Industry Association (HIA) attacked Tuesday’s federal budget for failing to stimulate housing supply, describing the budget as “a missed opportunity to deliver a concrete housing plan”. “Australia needs to be delivering a quarter of million new homes year on year to meet our growing population and put downwards pressure on housing and rental

0

Iron ore runs the seasonal gamit

Never say never with iron ore. especially with seasonals. Having been unusually weak, we’ve popped in line with seasonal strength. SMM has decent report on conditions. Today, the iron ore futures gradually strengthened after a weak start, fluctuating upward throughout the day. The most-traded contract I2505 finally closed at 780, with a daily increase of

0

AI capex bubble ready to pop?

The Market Ear is still looking short-term. SPX technicals SPX reversed right on the 21 day moving average. Not overly surprising given the recent squeeze. Support: 5600, resistance: 5850. Maybe we just need to range for a bit… Source: Refinitiv NASDAQ technicals Also reversing right on the 21 day. Support: 19600, resistance: 20800. Source: Refinitiv

5

Macro Morning

As the April 2 deadline the ultimate round of US tariff’s beckons, the Fanta Fuhrer couldn’t help shoot early with a blanket 25% car tariff, thus dooming the domestic US car industry as the world will shift to boycott US made vehicles. Great work Donny! Trump’s Tariff Tirade beckons. European shares were able to rebound

13

Has the Australian job market turned “calamitous”?

Earlier this month, Roy Morgan released its shadow labour market report, which reported a significant increase in unemployment to 11.5% in February, with underutilisation (i.e., unemployment plus underemployment) surging to 21.7%. Roy Morgan’s underutilisation rate is the highest on record outside of the pandemic. Roy Morgan CEO Michelle Levine addressed the Mumbrella Retail Marketing Summit

12

Australian property: an $11 trillion productivity drain

Data released this month by the Australian Bureau of Statistics (ABS) showed that the total value of Australia’s dwelling stock hit a record high of $11,032.2 billion at the end of 2024, with the average dwelling valued at $976,800. The hyperinflation of home values helps to explain why Australian households are ranked among the wealthiest

37

Macro Afternoon

Asian stock markets are doing slightly better today given the mixed result overnight although S&P futures are looking more robust given more Trump talk about caving in on tariffs, although who knows what will actually happen as another distraction is likely soon given the recent intelligence foul up by half his Cabinet. The USD is

14

The rotten fishead confesses

The fish rots from the head, they say, and Michael Stutchbury’s destruction of the AFR is great case in point. Today, he confesses. How about this? Australian supermarket shoppers have been hit by significantly lower grocery price rises than if they were living in the UK, the US, Canada or New Zealand. Yes, lower price

2

American stocks are back!

The Market Ear argues for the reverse pivot today. Europe vs US is done 1. Valuation gap closed… SAP on 40x, GOOG on 18.5x, MSFT on 29x. Mag7 valuation now looking ‘cheap’ vs historic 2. Europe benefited from exodus from US tech , US tech as a sell is significantly less obvious here 3. Market

6

Inflation data green lights April rate cut

Wednesday’s monthly CPI indicator from the Australian Bureau of Statistics (ABS) printed significantly below expectations. The headline CPI was only 2.4%, below market expectations of 2.5% and below the midpoint of the Reserve Bank of Australia’s (RBA) 2-3% target band. The underlying measure, trimmed mean inflation, also fell to 2.7% and is now well within

17

Bowen blows billions on green hydrogen fantasy

Last week, the Albanese government pledged over $800 million in production subsidies to a green hydrogen development in remote Western Australia. This is part of an $8.7 billion federal government war chest to create incentives for green hydrogen. Labor’s Future Made in Australia (FMIA) plan, announced in 2024, provided a budget allocation of $6.7 billion

1

Monthly CPI misses again

Via the ABS. CPI analytical series Seasonally adjusted 2.4 CPI excluding volatile items* and holiday travel 2.7 Annual trimmed mean 2.7 Most are components coming off except regulated prices like education, alcohol and tobacco, and health, which will fall in due course given they are indexed to the headline benchmark, which has crashed. It’s over.

1

Iron ore firms as housing falls

Decent output levels are keeping iron ore supported for now. There’s nothing good happening property. Compared to December, China’s on-budget fiscal revenue and off-budget land sales revenue both weakened meaningfully in January-February, more significant than the deceleration in government spending growth. Our proprietary “augmented fiscal deficit” (AFD) metric widened slightly in February vs. December on

1

Australian dollar tortured by the orange madman

DXY faded a little AUD lifted a little. Lead boots are at a standstill. Gold pausing. Trump lunacy has overtaken oil as he smashes Venezuela and Iran while promising cheaper petrol. Copper is insane. This is bad for everybody except Goldman Sachs. Big miners sag on. EM yawn. Junk yawn. Yields eased. Stocks firmed. I

2

Chicken Chalmer’s budget high

Treasurer Jim “chicken” Chalmers’ has released a hopeful new budget based upon some rosy assumptions. The headline numbers are realistic, but the wage price index is not going to re-accelerate unless unemployment falls more than forecast amid ongoing mass immigration of cheap Indian workers. This is a problem for revenue, especially with the mooted tax

0

Macro Morning

A bit of Fedspeak overnight was overshadowed by the Clown Show in the White House overnight as markets remain somewhat hesitant as the April 2 deadline for Trump’s Tariff Tirade beckons. European shares were able to rebound firmly while Wall Street gave up some late gains to finish slightly higher. The USD pulled back ever

16

Population forecasts exacerbate housing crisis

The Albanese government’s first budget, released in October 2022, forecasts net overseas migration of 470,000 over its first two financial years (2022-23 and 2023-24). They delivered more than double this number, with 1,060,000 net migrants arriving over nine quarters to Q3 2024. The May 2024 federal budget forecast net overseas migration of 260,000 for this

26

Betting markets abandon Peter Dutton

Roy Morgan Research has released polling, taken before Tuesday’s federal budget, showing that Labor (53%) has gained a strong lead over the Coalition (47%) on a two-party preferred basis. “If a Federal Election were held now, the ALP would be returned to Government with an increased majority with the ALP”, Roy Morgan reported. Roy Morgan’s

19

Labor’s budget rolls out the pre-election pork

Labor handed down the ultimate pre-election pork-barreling budget, promising workers two more rounds of tax cuts and increasing expenditure in what will be the largest budget deficit since the pandemic. Major announcements included: a $17.1 billion package of income tax cuts (over five years); an $8.4 billion boost to Medicare; a $1.8 billion extension of

28

Macro Afternoon

Not much action across Asian stock markets although offshore Chinese markets are feeling the pinch while mainland shares are unchanged as are the satellite Australian local stocks which have tread water again. The USD is also largely unchanged against the major currency pairs while the Australian dollar is failing to get back above the 63