Good morning! It’s Friday – there’s lots of news, and a huge rumour going around the financial markets. Where can we start?
1. How about with “the rumour”?. Senior fund managers are talking about a possible sale of a massive arm of one of the big four Australian banks. It makes sense. It fits the facts. And it makes a great talking point for Friday.
2. That wild Australian unemployment number. +121,000 in August, apparently, the equivalent of American creating around 1.5 million jobs in a single month. Everyone’s treating it as if it’s a bit of fun – traders, economists, statisticians, CEOs, investors, business leaders, tradies, shopkeepers… you get the picture. The exception is: Australian government ministers, who couldn’t help themselves. According to these guys, the data which beat the market by around eight times (eight times, not points!) apparently “demonstrate a continued underlying softness in the labour market”.
But guys, guys. They go on to say: how important it is in terms of passing the Budget measures for jobs.
Where do you start with this? Full-time jobs are up 14,300. Part-time jobs are up more than 100,000. It might be wacky, but it can’t all be wrong. It doesn’t, in any way, bolster the political case for passing the Budget. It’s irrelevant to the government’s current arithmetic problems in the Senate.
Joe Hockey should know better to have a statement go out under his name that says there’s “121,000 growth in employment” as if it’s some kind of problem.
Re-group, people. Deep breath. And fire that advisor.
3. Now for the actual analysis. The most important number you should be thinking about is a simple one: there are now more people in Australia working than ever before. This means more people doing stuff every day, more people making and creating things to sell, and more people who have things to do. Take out the nerdy analysis – the noise – and the signal is in there. There’s more than 10,000 real full-time jobs, easily. Job creation neuters all headlines: when people know there are jobs going, they will spend.
4. And the Aussie dollar is still getting flogged. It was 24 out-of-control hours for the Battler on the currency markets, particularly with a wild jobs print which sent it soaring, but the downward trend of the week has resumed. It’s now down through a new low of US91c. Australia’s currency is no longer a plaything of traders but a serious offload for big funds, who are suddenly looking elsewhere as the US dollar regains its position as the be-all in anticipation of the Fed raising rates. Yesterday the Aussie was 88c at retail banking exchanges in Sydney – a meaningful difference to holiday planners compared where it was a year ago.
5. So to the markets and stocks were varied around the world overnight. But there are clear signs of de-risking, including in the UK before the Scottish independence vote next week. Asia, customarily, has twin themes: with the Nikkei doing well but stocks in Shanghai reversing, once again, off recent highs.
6. The Asia-Pac Friday looks fascinating now. SPI futures – the general measure of where Australian stocks will go on any day – is up on the September contract but down for December. A flat day looms, barring any major announcements. There is no Aussie data today but over the weekend we get Chinese production and retail sales.
7. Are bonds in a bubble? Jim Reid and the Deutsche Bank team have a 104-page note out on the issue. The answer is: probably. Be careful out there.
8. Eight days to go in one of the world’s biggest talking points – whether Scotland should say Yes, and take the offer of independence from the UK. This is going to go down to the wire. A new poll has reversed the previous momentum towards independence ahead of the poll on September 18th. If you love votes, the count on the 19th in Australia is going to be a big, emotional day either way, whatever your view. In our time zone, you need a great TV and some comfortable chairs in the office for next Friday morning. And possibly some Scotch.
9. Reading Harry Potter makes you a better person, research shows. Business Insider’s Drake Baer has the details.
10. Prince Harry was close to a bad road smash. En route to the Invictus Games in London, Harry’s police outrider smashed his motorbike into a Prius that pulled out at the worst time. Harry allegedly wanted to stop, but his driver hit the pedal, fearing a terror attack. The Prius came off worse, with the driver having to be cut free. The pics are grim, but the CCTV footage doesn’t look great either – especially for the Prius driver. Photos at The Daily Mail.
Bonus item: A thought-prodder, ahead of the weekend. Priscilla Yuki Wilson, who is half Japanese and half black, sent her image to a range of designers around the world asking them to make her beautiful. The results, if you flick through them here, are incredible. Here’s the starting point:
Catch you Monday. I’m on Twitter: @colgo