Data Diary

One further thought following on from our previous post (here) – if the RBA Commodity price index is at record highs, why is it then that industrial metals are trading historically cheap relative to gold? Perhaps it is a reflection of the uncertainty that prevails across the markets.  There has been enough talk about the debasement [...]

The good news keeps on coming – the RBA released its commodity price index yesterday (here): And from the RBA: Over the past year, the index has risen 53 per cent in SDR terms. Much of this rise has been due to increases in iron ore, coking coal and thermal coal export prices, although all components [...]

Australian equities have benefited from two major trends over the last couple of decades (casting aside the credit bubble on the grounds that it hurt).  They are 1) the growth in our compulsory superannuation investment pool and 2) the growth in China’s demand for all things resources.  It’s interesting then to compare and contrast the [...]

The RBA’s commodity price index continues to push on into the hill climbs of the Pyrenees: According to the RBA (here), the key drivers were: Preliminary estimates for July indicate that the index increased by 2.7 per cent (on a monthly average basis) in SDR terms, after rising 2.2 per cent in June (revised). The largest contributors to the [...]

Not quite a random walk, more like the one lurch forward, two staggers back, that is how the market has greeted the ‘news’ that China will be taking the yuan to a crawling peg.  First, risk markets rallied as we all looked inquisitively at each other and asked ‘isn’t this what we wanted?’.  Then with [...]

Time is compressing.  Our collective attention span is contracting.  Memory and imagination are being squeezed.  What are the chances then that governments can act in our long term interest when their constituencies are driven by the here-and-now?  This argument lies at the heart of those that foresee a hypernflationary outburst on the horizon. Some clear [...]

The Governor of the Reserve Bank of Australia, Glenn Stevens, made a speech about ‘Recent Developments’ on Wednesday (the full text here).  In reflecting on the possible impact of events in Europe, he made this assessment: It is usually the case, however, that the most important impacts on Australia from these sorts of events are not [...]

The RBA released its monthly commodity price index for May10 yesterday (you’ll find it here).  Perhaps surprisingly, the overall index was up. The fact that it continued to climb is partly a function of its composition (see here for a breakdown – note gold makes up a handy 9.5%) and partly the way it is [...]

Great read from James Montier at GMO (via Zero Hedge here). It includes some data on commodity futures markets that follows up nicely on our thoughts from the other day (here). First up – a chart of the percentage of the futures market accounted by speculators: As a result of the rising influence of speculators, [...]

This time it is different.  No really.  While the equities markets have been rifling lower and credit spreads are wider – absolute yields have actually been falling.  As opposed to the ‘last time’, when mass liquidation of credit leverage pushed yields to extremes, higher grade bonds of all ilks have caught a bid.  You could [...]