Good morning and welcome to Thursday, where it’s only two days to go before the AFL Grand Final.
First, to the markets:
1. The big news was Japanese Prime Minister Abe’s comments that essentially said the yen has weakened enough and he is cognisant of the impact on his Asian neighbours by yen devaluation. This sent the Nikkei lower initially but it recovered to be down just 0.24% to 16,167. Shanghai stocks ripped higher to their highest close since March 2013, up 1.48% to 2,344 after trading activity and account openings following some regulatory changes last week saw brokers move sharply higher. In Hong Kong, the market rose 0.36% to 23,922.
2. The ASX futures market was buoyed by offshore moves with the December contract rallying a solid 23 points to 5,401. The rally in iron ore overnight – however ephemeral it may be – should help at the margin as well. It bounced with the December contract up $1 a tonne to $79.55. Is it a sustainable bottom? Only time will tell.
3. The Aussie dollar, while under pressure against the US dollar, might do well against European crosses in the weeks ahead. This morning the Aussie is at 0.8882, euro at 1.2778, GBP at 1.6335 and the yen defied Abe’s comments and is back above 109 at 109.05.
4. Commodities are getting crushed and it’s not just iron ore. One of BI’s favourite market-watchers Mark Dow has just posted a new blog titled “Of Trends, Yields, and Metals” in which he says commodities got over-loved and overhyped from 2004-2011.
We know there was a boom in China. We know there was a boom in commodities. And we know Chinese entities were stockpiling commodities and in many cases pledging them as collateral. They are now unwinding.
Just wait, he says, until the “wooden stake” of higher rates gets driven right the way through.
5. Time to farewell an old friend? Negative gearing has been a staple of the Australian household financial diet for decades now. But, according to the RBA, real estate prices have become so skewed by investor activity in and a very narrow percentage of the population that negative gearing has become unfair and regressive.
6. Circular Quay’s spectacular upgrade. Well, one building, really, but it’s a show-stealer. AMP’s 50 Bridge St office has been given the green light for a $1bn upgrade, and the design from Danish architects 3XN looks amazing, spanning over 43 storeys and comprising of layered angular shapes. And you can call it a Circular Quay upgrade because, well, look at how it’s going to dominate the Harbour skyline.
And that isn’t easy.
7. The most powerful woman in the world. From an ISIS perspective anyway, because Major Mariam Al Mansouri, 35, is raining bombs on them. The United Arab Emirate’s first female Air Force pilot is making news not just because she’s in the squadron, she’s leading it. Al Mansouri told Deraa Al Watan magazine that rather than competing with her male counterparts, she “focused on competing with herself to improve her skills”. Earlier this year, the Social Progress Index ranked the UAE as number one in the world for treating women with respect and equality.
8. AC/DC fans, we have good news and bad news. Let’s start with the bad – guitarist Malcolm Young has officially retired. He’s been fighting sickness and is in and out of hospital, as reported back in April. We wish him well. His nephew Steve will join the band on the road as AC/DC – and here’s the good stuff – launch their first new album in six years. It’s called Rock Or Bust and it’s awesome even though it won’t be released until December 2.
9. Apple’s iOS update didn’t work. Hopefully, if you own an iPhone 6, you didn’t rush out and download it. It’s back in the Apple garage now after many users complained it was bricking their phones and disabling Touch ID. The timing is spectacularly bad – overnight, Samsung surprised everyone with an early release of the Galaxy Note 4 and BlackBerry pinned its future on the weirdly shaped Passport.
10. “The reports of cannibalism have not gone over well.” That understatement of the year comes from a documentary made in which Baboola, a self-confessed cannibal in the Uganda, details, er, what it’s like. He says he’s given it up, but sometimes falls off the wagon on special occasions. It’s actually a serious problem – Ugandans don’t go out at night to avoid supposed cannibals and have recently begun destroying the homes and businesses of those suspected of cannibalism.