Good morning! Let’s start the week.
1. There were many disturbing aspects to the counter-terrorism raids in Melbourne over the weekend, and among them was the force applied, which makes them stand out from the usual straightforward nature of these arrests after the knock on the door in the dead of night. Police used brute force and, in one confrontation, capsicum spray to subdue a suspect who resisted arrest. One neighbour recalled hearing “a whole heap of screaming outside. It kept going for at least 20 minutes. It scared the crap out of me”. But the no-nonsense approach by the police is understandable given they were the targets of the alleged plot to an atrocity around Anzac Day celebrations.
2. There was chaos on global markets on Friday evening Australian time as Chinese stock futures sold off 5%, and other markets followed lower, with a big undertow in Europe being the continuing impasse over Greece’s debt. In the end the US markets were down over 1% and ASX futures are pointing to a lower open. The big question is what will happen with Chinese stocks, following on from this next item…
3. Chinese authorities delivered a big counterbalancing move to the fall in futures last night, lowering a key deposit requirement for banks by a full 100 basis points, which should release more loans through the economy. The determination of Chinese policymakers to keep releasing stimulatory measures to manage the slowdown can’t be underestimated and has been behind the huge surge in the Shanghai and Hong Kong indices in recent weeks. The reaction in Chinese markets will be fascinating this morning.
4. It’s a big week for the Australian economy with Glenn Stevens addressing a lunch hosted by Goldman Sachs in New York just after midnight tonight. If he feels the need, it’s the perfect opportunity to manage expectations on the May interest rate decision. On Tuesday we get the minutes from the RBA’s April meeting. And the week will really revolve around the release of the Q1 inflation data on Wednesday morning. The market’s expecting quarterly inflation at a tiny 0.1%. We’ll also see Chinese “flash” PMI on Thursday. Here’s a more detailed look at the week ahead for markets.
5. Will Australia really reel in the deficit? It’s three weeks to the federal budget, and the AFR points out this morning that Treasurer Joe Hockey has been mincing his words when it comes to reducing the headline deficit, saying that’s what the government was “aiming at”, but refusing to repeat the PM’s assertion that the deficit will decline every year.
6. Netflix says piracy drives down prices. The aggressive international expansion of the streaming giant helped send its stock surging 20% last week, and it has explained that in countries with high levels of content piracy (cough, Australia) it tends to have more aggressive pricing to try wean consumers off the habit.
7. Mobilegeddon is coming, and it could kill some small businesses. This week, Google releases a major change to its algorithm that will penalise businesses whose digital presence is not optimised for mobile. The effect of this, some speculate, will be to reduce foot traffic to some businesses: a cafe in a neighbourhood will no longer show up in searches, and so casual customers will end up going elsewhere. The change, which some are calling Mobilegeddon, rolls out from tomorrow. Mobile devices now account for almost two-thirds of all internet traffic in Australia, according to Nielsen. This chart shows the stunning growth in mobile unique browsers over the past year in Australia:
8. The bee economy. When Australian inventors Cedar Anderson and his father Stuart released their radical new design for a beehive on the crowdfunding platform Indiegogo in February, they were hoping to raise $US70,000. The campaign closes tonight, and looks set to top $US12 million. Their invention allows beekeepers to extract honey without disturbing the hive as happens with conventional techniques.
9. Australian super funds have had their biggest quarter in three years. The continued grind higher on the ASX has been a boon for Australian retirement funds in recent months. Here’s the chart:
10. Worried about your corporate data security while on business trips? Here’s what elite hackers do when they see an iMac in their fancy hotel room: unplug it and throw a towel over the monitor to cover the webcam.
Have a cracking day. I’m on Twitter.
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