Australia 02 (Jan 11 - Dec 25)

Re: Australia 02 (Jan 11 - Dec 16)

Postby winston » Wed May 04, 2016 6:41 am

Ahead of the curve ?

Overnight Australia's central bank cut interest rates. We mentioned the likelihood of this happening yesterday. Stocks in Australia shot higher by 2%.

While there won't be too many people spending time on considering how and why it fits into the big macro investing and economic theme, we'll discuss it here today. What has happened in Australia says a lot about why the Fed has been so afraid of moving too early and too fast.

Mistakes in this environment can undo a lot that has been done. In the case of the Fed, it could undo the global economic recovery.

First, Australia is interesting for a number of reasons. Australia has made big mistakes, so has Europe. When the world was clearly buckling in 2007-2008, both the ECB and the RBA kept raising rates. Then they finally slashed rates like everyone else.

The RBA cut rates from 7.25% down to 3% at the depths of the global economic crisis, in sympathy of the massive policy responses from the leaders of the major economies of the world. But they were quick to start raising rates again.

Given China gobbled up cheap commodities back in 2009 with freshly printed yuan, helping to pull the global economy out of the doldrums, the Australian economy actually averted recession and began showing signs of a hot expansion in the early days of the global economic recovery.

The Australian economy is closely tied to the health of the Chinese economy. When China demand is healthy, they tend to buy a lot of commodities from Australia. And in the past seven or so years, they've bought a lot of real estate in Australia. With what looked like a sharp recovery underway, from 2009 to 2010, the RBA raised rates from 3% to 4.75%.

Now, within the course of this hiking period, Europe confronted the first wave of the sovereign debt crisis threat. But with the coordination of the policy response from the European Central Bank, the Fed and the Bank of Japan and China, the first round of the sovereign debt crisis was warded off. And China played a large role there too. They came in as buyers of euros, and of European sovereign debt and Greek state-owned assets.

So, like the central bank in Australia, the European Central Bank was also quick on the draw. The ECB started raising rates, assuming a sharp V-shaped recovery was coming for Europe and the global economy.

The ECB and the RBA, underestimated the scale of the crisis. And it's been to the detriment of both economies. Europe has since re-entered recession and has had to fight off more iterations of the sovereign debt crisis, both of which have culminated in the launch of QE in Europe, almost six years after the worst period in the global economic crisis. And with the slowdown in China, the Australian economy has been sucking wind too.

So we have a tale of two central banks (in Australia and Europe) that jumped the gun on rate hikes, and were forced to reverse course, but not after doing damage to their economies.

Still, as we discussed in the past couple of weeks, we think a global economic and market sentiment shift is here, in the early stages. And it's at the early stages (the turning points) where the best investors are placing their bets. That's where the biggest rewards come. By the time it smacks everyone in the face, the opportunity for big returns have passed.

We think that "smack in the face" moment will be when Europe starts showing "green shoots." In the past month we've already seen a positive surprise in first quarter GDP and yields on German debt have been moving higher (looking as if the negative yield scare won't happen on the benchmark 10-year German bund — that's a positive for stocks and the outlook).

With this in mind, remember we looked at both the Australian stock market and two key European stock markets yesterday (Germany and Spain). This policy divergence between the U.S. and the RBA and ECB is squarely positive for the prospects of this gap in the chart below, closing. That's why we think these global stock indicies offer the opportunity for big returns relative to the U.S. stocks.

source: Forbes Billionaire's Pro Perspectives
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Re: Australia 02 (Jan 11 - Dec 16)

Postby behappyalways » Mon May 30, 2016 3:33 pm

gone-in-four-hours-lendlease-sells-all-391-sydney-apartments
http://www.bloomberg.com/news/articles/ ... apartments
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Re: Australia 02 (Jan 11 - Dec 16)

Postby winston » Tue Jun 21, 2016 7:45 am

Australia taxes foreign home buyers

The proposed tax in Sydney’s New South Wales state to be announced this week would be only 4%, in Queensland it is 3% and in Victoria 7%.


Source: The Star

http://www.thestar.com.my/business/busi ... me-buyers/
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Re: Australia 02 (Jan 11 - Dec 16)

Postby winston » Sat Jun 25, 2016 12:24 pm

Market cools in Australia

House prices in Australia nudged down in the first three months of the year, says the Australian Bureau of Statistics.

The official residential property price index (RPPI) fell back 0.2%.

House prices in all eight state capitals stood still at 0%. Individually, prices were up slightly in Melbourne, Brisbane and Adelaide, while Perth (-1.7%) and Darwin (-2%) plunged in line with the rapid decline in mining and commodity prices worldwide.

The cities are centres for commodity resources.

“Property prices are about right and nowhere near a bubble,” said economist Shane Oliver, of AMP Capital.

“The figures are overstating a cooling in the market and we should not read too much into them.”

Source: iexpats.com
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Re: Australia 02 (Jan 11 - Dec 16)

Postby behappyalways » Sun Sep 18, 2016 4:36 pm

Australian banks face off against rate-rigging lawsuits
http://www.bbc.com/news/business-37127579
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Re: Australia 02 (Jan 11 - Dec 16)

Postby winston » Wed Dec 07, 2016 10:00 am

Is Australia Heading To A Recession?

By Shuli Ren

Australia’s September quarter GDP numbers, released this morning, came as a big surprise to the markets.

The Australian economy has been surprisingly resilient, not having had a recession in over two decades.

But in the third quarter, Australia’s GDP contracted by 0.5% from the June quarter, only the fourth fall in GDP in 25 years!

So is Australia heading to a recession?

It would be too early to reach that conclusion. Australia’s Q3 growth number was weak because the first-half was very strong.


Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... recession/
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Re: Australia 02 (Jan 11 - Dec 16)

Postby behappyalways » Sat Jan 21, 2017 8:49 pm

涉水橫過「鱷魚潭」
澳原住民慘被鱷魚咬死
http://hk.apple.nextmedia.com/internati ... 1484630264
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Re: Australia 02 (Jan 11 - Dec 17)

Postby winston » Sat Feb 04, 2017 9:39 pm

Chinese Foreign Minister to visit Australia in wake of Donald Trump tiff

While China is Australia’s largest trade partner, relations between the two countries have been complicated by Australia’s alliance with the US.

In July, a joint statement from the US, Japan and Australia, urged China not to construct military outposts and reclaim land in the disputed South China Sea.

At the time, Wang condemned the statement and accused the three countries of “fanning the flames”.

China and Australia signed a free trade agreement in 2015, after years of difficult negotiations.


Source: AFP

https://www.hongkongfp.com/2017/02/04/c ... rump-tiff/
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Re: Australia 02 (Jan 11 - Dec 17)

Postby winston » Mon Feb 06, 2017 5:55 pm

Australia To See Zero Growth In 2017, 3 Rate Cuts Likely: Credit Suisse

By Shuli Ren

Credit Suisse painted a dim view of the Australian economy in its 2017 and 2018 economic outlook, seeing no growth this year and at least two interest rate cuts from the Reserve Bank of Australia.

Analyst Damien Boey wrote:

Our stagnation forecast might look a little extreme. But we note that the partial indicators are not stacking up well for 4Q16. Following an 0.5% quarter-on-quarter contraction in real GDP in 3Q, it appears that there will be little if any rebound in 4Q activity, contrary to what many forecasters (including ourselves) have been expecting:

Our proprietary domestic demand “now-casting” (DDNow) model based on a wide range of partial and sentiment indicators points to zero domestic demand growth.

At the same time, the trade balance has become more positive in nominal terms, but slightly more negative in real, or volume, terms. Nominal exports rose by 12.2% in 4Q, while nominal imports rose by 1.6%. But the ABS has also reported that seasonally adjusted export prices rose by 12.7% in 4Q, while import prices rose 0.5%.

Real exports contracted by 0.5% in 4Q, while real imports rose by 1.1%. Subject to future data revisions, it appears that trade was a net drag on real GDP growth of around 0.3%.

We believe that the RBA will cut at least twice in 2017, and probably three times to below 1%. Whether or not it cuts more or less aggressively depends on the scale and timing of fiscal stimulus, in our view. Our rates’ outlook is at the bottom of consensus and has certainly not been priced into the curve.

The RBA will be meeting this week

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... it-suisse/
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Re: Australia 02 (Jan 11 - Dec 17)

Postby winston » Tue Feb 07, 2017 2:56 pm

RBA To Remain On Hold In 2017?

By Shuli Ren

The Reserve Bank of Australia sounded an upbeat tone on the Australian economy in its latest policy statement.

RBA now sees Australia to grow at “around 3 percent” over the next few years.

RBA’s optimistic stance is based partly on better global economy, noting “conditions in the global economy have improved over recent months” and that “above trend growth is expected in a number of advanced economies”.

But the central bank was also confident Australia could successfully transition out of commodities-led boom, noting “GDP was weaker than expected in the September quarter, largely reflecting temporary factors.

A return to reasonable growth is expected in the December quarter.”


Source: SCMP


http://blogs.barrons.com/asiastocks/201 ... d-in-2017/
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