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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

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Weekend Reading and MB Media Appearances

International Reads: The Most Common Essential Jobs in the US Don’t Pay a Living Wage – Truth Out U.S. home prices have far outpaced paychecks. See what it looks like where you live – NPR Elon Musk Begs Advertisers to Return as Twitter’s Revenue Plunges – Yahoo Americans may struggle for another five years as

13

Macro Afternoon

The latest Japanese CPI print was the highlight of the last trading session in Asia with a slightly softer than expected print still seeing Yen extend its losses to multi decade lows. Volatility is expected on Wall Street tonight due to timing issues with futures so watch out for a potentially mixed return over the

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This is the recession we had to have

On Thursday, Statistics New Zealand released national accounts data for the March quarter, which showed that the economy emerged from a technical recession, growing by 0.2%. However, owing to New Zealand’s historically high population growth (immigration), GDP in per capita terms fell by 0.3%—the sixth consecutive quarterly decline. This meant that New Zealand’s per capita

12

Melbourne left behind as house prices boom

CoreLogic’s daily dwelling values index shows that Melbourne continues to be left behind while home values across other major capitals continue to rise. Over the 28 days to 21 June 2024, Melbourne’s home values declined by 0.1%, whereas values rose by 0.7% at the 5-city aggregate level: CoreLogic shows that Melbourne home values have risen

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Welcome to the decade of deficits

Earlier this week, Justin Fabo at Antipodean Macro published the below chart showing how Australia’s consolidated budget deficits will remain in deficit for as long as the eye can see, driven by the state governments: On Wednesday, Michael Read at The AFR reported analysis from ratings agency S&P Global showing that Australia’s state governments are

5

Mortgage arrears climb steeply

CoreLogic is out with an update on climbing mortgage arrears. More loans are falling behind on their repayments: Mortgage arrears have been rising from their COVID lows of just 1.0% in Q3 2022, reaching 1.6% in the March quarter of 2024. This is the highest reading on mortgage arrears since Q1 2021. Higher mortgage arrears

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Axe parent visas to ease population, fiscal and skills shortage pressures

The ANU’s Alan Gamlen says that partner migrants should be used to solve skills shortages. “An important part of the thinking going into this points system recalibration is how can we find low-hanging fruit among the family migrants – in terms of targeting applicants with attributes that best predict success in Australia, and possibly also

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Overheated stocks cool off

The Market Ear with the latest internals. Watch it Watch the NASDAQ candle carefully. Possible shooting star/inverted hammer candle post such a melt up could be a short term signal of this market about to take a pause. As always, we need a confirmation. Refinitiv Biggest NVDA candle We are seeing the biggest down candle

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The great migration “catch-up” myth

On Tuesday night, I had a wonderful 90-minute discussion with Martin North of Digital Finance Analytics on all things related to the Australian economy, politics, energy market, and housing market. Among the many topics discussed was the myth that Australia is merely experiencing “catch-up” migration from the pandemic. Below a key highlights from this discussion

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Sell iron ore

Shanghai rebar is not well. Iron ore is trying but largely failing: Dalian is likewise weak: Steel mills have destocked coking coal: There’s not much good news coming from China. Goldman: The PBOC governor Pan Gongsheng delivered a speech on Lujiazui Forum in the morning of June 19. The speech discussed China’s current monetary policy

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Aussies crowd into group homes amid deepening rental crisis

Defenders of mass immigration frequently assert that a decrease in the population per dwelling is the main factor contributing to Australia’s rental crisis. The proliferation of Australians moving into shared housing in order to save money refutes their claim. On Tuesday, The ABC reported the following: More than 350,000 Australians are living as part of

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Aussie flash PMI sags

Judo Bank flash PMI has rolled again: Flash Australia Composite PMI Output Index: 50.6 (May: 52.1), 5-month low Flash Australia Services PMI Business Activity Index: 51.0 (May: 52.5), 5-month low Flash Australia Manufacturing PMI Output Index: 47.7 (May: 49.2), 3-month low Flash Australia Manufacturing PMI: 47.5 (May: 49.7), 3-month low Warren Hogan is still glass

4

Macro Morning

Wall Street reopened from its mid week holiday, started with potential but lost ground as hesitation and confidence disappeared with tech stocks leading a mild selloff. European stocks however reengaged to the upside on the lower Euro as the Swiss Central Bank cut rates again while Yen made another multi decade low. The Australian dollar

1

Australian dollar hit from all sides

DXY is firming again: AUD is stuck in the range. Up against EUR: North Asia is woeful: CTAs are pressing another oil head fake: Driving metals: And miners: EM has held support: Junk is threatening breakout: The yield curve steepened: Stocks reversed: The AUD is being hit from all sides by forex: DXY is being

5

RBA to drive unemployment to 5%

HSBC chief economist Paul Bloxham believes that the Reserve Bank of Australia (RBA) will need to see Australia’s unemployment rate rise to 5% before it considers cutting interest rates. “The unemployment rate at the moment has risen from 3.5% to 4% and we think that the unemployment rate will probably have to get up closer

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Credit card activity sinks again

Westpac’s credit card tracker is not improving: The Westpac Card Tracker Index* continues to warn of a renewed weakening in consumer demand. While the index held steady at 132.8 over the first two weeks of June it remains materially below the 136.2 average recorded in the March quarter. If the index continues to hold around current levels

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Macro Afternoon

With Wall Street returning from its mid week holiday tonight, risk taking has reduced across most markets with Asian stocks mixed or lower across the region. Local stocks are just holding on to their post RBA hold gains with the Australian dollar still hovering just below the 67 cent level. Oil prices are holding on

1

Australian dollar stuck in the mud

HSBC with a report that closely mirrors my own views on the AUD. Keywords including “peak US exceptionalism”, “exhausted Fed repricing”, “peak China pessimism”, “commodity upcycle”, and “a higher-for-longer RBA” were commonly featured as arguments during AUD-USD’s recent rise. We think this is only partially correct. Being highly dependent on external drivers, AUD-USD has remained

6

AEMO declares gas emergency

We interrupt your regular programming of nuclear balderdash with the newsflash that: Australia’s energy market operator has convened an emergency meeting of the gas industry after warning fuel supplies are running tight and without urgent action there could be insufficient reserves for the rest of winter. The alert underscores Australia’s tight gas supplies, which could

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MB Fund Podcast: China Stimulus: Oasis or Mirage?

China recently re-sparked a metals boom with more announcements of stimulus. We are joined by David Llewellyn-Smith today as we explore the stimulus, what is real and what is a mirage. View the presentation slides Can’t make it to the live series? Catch up on the content via Podcasts or our recorded Videos. Damien Klassen is Chief Investment Officer