Last week the ACCC released their Gas Inquiry 2017-2030 interim report, and it makes horrifying reading. It is such a monumental stuff-up over a couple of generations, it’s hard to believe the corporations did not deliberately set up to maximise profit at the expense of ordinary Australians, while successive Governments were complicit, either because they dared not confront big gas, were scared of the consequences via sovereign risks of changing the rules or simply were ignorantly led by the nose.
All this has stoked inflation via higher electricity prices to the point where now the Government is using more taxpayer money to hand support payments to households. You can’t make this stuff up! Mind you the ACCC report which is very detailed manages to skate round the core issue.
Of late the government has made minor changes to overhaul regulations, which in theory allows it to intervene and limit exports of LNG. In practice though little has changed, and unlike in WA where is the a reservation for domestic supply, the east coast is stuffed.
As I discussed with Robbie Barwick yesterday this is one of the greatest scandals Governments have created for ordinary Australians, but yet again, no signs of bold action, in the form of gas reservation, just a muddle in which people are being taken to the cleaners, even as the Government offers more “help” on electricity prices, at the expense of taxpayers.
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is an edit of a live discussion with Robbie Barwick, Research Director for the Australian Citizens Party as we discuss the real issues to be chased down this year, even as we face into the upcoming election. Given both major parties seem to be dancing to the same old tune, what should be agenda be, and how can we move the dial to the betterment of ordinary Australians?
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
Find more at https://digitalfinanceanalytics.com/blog/ where you can subscribe to our research alerts
Another outing with our property insider Edwin Almeida, as we look at the early trends for 2025, against the political backcloth of the upcoming election.
Whilst promises are cheap to make, we question their effectiveness, and ask how seriously should we take them.
Edwin makes some more predictions, and we look at the latest numbers. Things will get interesting over the next few months!
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
In this show we look at the latest from our household surveys to end December 2024, and highlight where mortgages stress, rental stress, investor stress and overall financial stress predominates, as housing affordability continues to crash.
As a result, the dream of home ownership is becoming a nightmare for many.
We also examine the latest price scenarios across the states, and spot those likely to fall and those more likely to rise.
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
This is our weekly market update, where we start in the US, cross to Europe and Asia, and end in Australia, covering commodities and crypto along the way.
And this past week saw markets lower, with the MSCI global index down another 1.58% and down nearly 4% for the past month. Wall Street’s main indexes closed their second consecutive week in the red even as the US Dollar was stronger with the US Dollar Index Futures up 0.44% at 109.67, which will put further pressure on other economies around the world in including Australia.
Unexpected strong December payrolls data, with the US economy adding far more than expected jobs last month, hammered hopes for lower interest rates though US stocks closed off their session. Bond yields continued to climb, with the haunting risk of higher rates for longer putting more pressure of some stocks, ahead of the Trump 2.0 agenda turning from speculation to reality in the next couple of weeks. Longer-dated U.S. Treasury yields, which move inversely to prices, jumped to their highest levels since November 2023, with the 10-year hitting a high of 4.79%.
Yields have gained 20 basis points since the beginning of the year amid a global government bonds selloff that has hit UK government bonds particularly hard, pushing 30-year gilt yields to their highest since 1998.
Outside of bonds, rising U.S. Treasury yields could dampen investor interest in stocks and other high-risk assets by tightening financial conditions and increasing borrowing costs for businesses and individuals.
Traders now see the FED lowering borrowing costs for the first time in June and then staying steady for the rest of the year although BofA Global Research is forecasting a potential rate hike saying the Federal Reserve’s rate-cutting cycle “is over”.
Traders’ confidence in the pound has taken its biggest dive this week for a third straight session of declines since the 2022 UK budget crisis ending at 1.2208 against the USD as a global bond selloff added to growing unease over Britain’s finances with Britain’s government bond market in the crosshairs as 30-year gilt yields there hit 27-year highs and 10-year benchmarks reaching levels not seen since 2008. This puts Britain’s finance minister under pressure as concerns over Trump’s policies have pushed the British government’s borrowing costs higher. Even though those gilt yield rises are largely just in line with what’s happened in U.S. Treasuries a worrying development in the UK is that sterling has turned tail too and stopped following domestic yields higher.
The ASX fell on the final trading day of the week, as a gloomy outlook for Wall Street trading ahead of a key jobs report pushed the bourse lower. The S&P/ASX 200 Index reversed modest gains earlier in the session to close at 8294.1 points, down 0.4 per cent.
The Australian dollar’s slump against the US greenback to around levels last recorded in the 2020 pandemic and 2008 global financial crisis has a lot of people talking. The Australian dollar ended the week 0.4 per cent lower against the greenback, touching a new two-year low of US61.47. There are consequences. A weaker currency is stimulatory for the economy and inflation, while a stronger exchange rate slows the economy and helps cool inflation.
So, standing back, we are right in the zone of uncertainty, with expectations of higher for longer rates back on the table with a strong US dollar likely to break things elsewhere. All up, we continue to expect periods of severe volatility, and lower growth trajectory, so no surprise to see more holding cash and waiting to see what plays out.
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
Yesterday I went through the latest ABS data on retail and highlighted that the Black Friday sales supported household spending growth through November. This is an important indicator on the state of the economy and is a factor which will influence the RBA’s February rate cut call.
But just like the proverbial Schrodinger’s cat – a famous thought experiment that demonstrates the idea in quantum physics that tiny particles can be in two states at once until they’re observed. It asks you to imagine a cat in a box with a mechanism that might kill it. Until you look inside, the cat is both alive and dead at the same time, its hard to tell what is really going on.
Actually, analysts are all over the place on these numbers, and the household spending indicators we got today from the ABS continued the confusion.
So it remains to be seen whether this uplift will be carried into 2025 or if it is a result of price-sensitive consumers capitalising on bargains and the typical festive season spending surge.
Let me know in the comments below, did you spend big over the holiday period, or hunkered down seeking bargains through the sales, along with many I see in my surveys?
I suspect both is true, which will make the RBA’s job hard next month. Though the simple truth I come back to is more are being sucked into the negative cash flow vortex thanks to the higher for longer interest rates. Which is not good news for the cat in the box!
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
I have been highlighting the unequal position of households across Australia, with significant numbers in financial stress, whilst others are still spending big, and seeing real wages growing fast. This is having a weird effect on data with some signals showing significant consumer strength, and others extreme weakness. This makes it difficult at the aggregate level for the RBA to set the level of interest rates, especially with inflation as reported yesterday shifting under their feet.
One such signal is retail trade date, which by the way the ABS will stop producing later in the year. They just released data on Australian retail turnover which rose 0.8 per cent in November 2024, seasonally adjusted. This comes after growth of 0.5 per cent in October 2024 and 0.4 per cent in September 2024.
The ABS says “Black Friday sales events proved once again to be a big hit, with widespread discounting and higher spending across all retail industries. “The popularity of Black Friday sales continues to grow with promotional activity now stretching across the entire month of November, not just solely focused on the Black Friday weekend.”
IFM Economist Alex Joiner put it differently: “Retail sales rise again on a per capita basis, doesn’t scream that rate cuts are desperately needed for the aggregate household sector.”
A couple of important takeouts, clearly some households have significant capacity to keep spending, and are not really feeing the pinch. Others who are under pressure took the opportunity to grab bargains (real or imagined) though Black Friday. And the continued drift to online purchases potentially has a profound impact on bricks and mortar shops on the high street, with many areas being hollowed out.
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
The REA Group just published PropTrack Rental Price Data to December Quarter 2024. They say that National median weekly advertised rents increased by 1.6% over the December 2024 quarter to a new high of $620. But note this the asking price of new rentals. And does not cover rental increases on existing property where the tenant has to pay more, or leave.
In fact, after capital city asking rents soared by more than 40% since the pandemic, rental inflation is slowing. But why you might ask? Well, given that around 70% of those in the rental sector have cash-flow pressures according to our surveys, it is mainly because we have now reached an affordability ceiling.
A greater share of household’s income is going to pay the rent, according to recent data from CoreLogic and ANU. In addition, some tenants have responded to these conditions by moving into group housing, which has tempered demand, or have moved back with parents.
So do not be deceived, this data which was reported as good news in some media today, needs to be taken in context. The slowing was the result of months and months of insidious financial pressure.
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
The latest monthly CPI data for November 2024 was released today, and while the headline rate rose, the important trimmed mean figure, which the RBA tracks, slipped in November despite being still able the top of the central bank’s target band.
The closely watched trimmed mean core measure, which smooths out volatile items and is the focus of the Reserve Bank’s attention, slowed to 3.2% from 3.5% in the prior month, according to data from the Australian Bureau of Statistics today.
Economists do expect the RBA’s next move would be to ease rates though they are divided on the timing given the somewhat sticky core inflation and an uncertain global backdrop. A complete suite of price data for the December quarter will be released later this month which will be an important input for the RBA’s Feb. 17-18 meeting.
So, perhaps the chances of the Albanese government getting a pre-election boost from a February rate cut have risen and Treasurer Jim Chalmers said inflation had been at the lower end of the RBA’s 2 to 3 per cent inflation target band for three months in a row, and unusually referred three times to bond market forecasts for a pre-election cash rate cut during a press conference, in a potential sign of the government’s growing expectations for mortgage relief.
And of course the weak Aussie and predicted larger Government deficits are barriers to rate cuts, as I discussed recently. So whilst there there might be a symbolic cut before May, those expecting significant cuts this year should bear in mind the latest FED vibe which is perhaps for only one cut in 2025 for US rates.
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/