10 Things You Need To Know This Morning In Australia

Good morning! It’s Wednesday, and we get Australia’s GDP data in a few hours’ time. Here’s what you need to know.

1. It’s Aussie GDP day. We get Q1 GDP data at 11.30am AEST (join us live) and with an export surge and a burst of consumer spending evident, economists are expecting a 0.9% rise for the quarter and a solid 3.2% year-on-year result.

2. Markets are flat. Both the S&P500 and the Nasdaq moved very little overnight and the Dow was up just 0.1%. Trade was light in Europe after Eurozone CPI printed at 0.5% versus 0.7% expected, another sign that the ECB needs to act with further stimulus in its policy announcement tomorrow night. Today we get services PMIs from around the world, including Australia.

3. Soc Gen’s profit cycle top. Highly regarded Soc Gen analyst Albert Edwards has called a top in the US profit cycle. Edwards says that investors missed a big move in the recent US GDP data which showed a “10% annualised slump in the US Bureau of Economic Analysis (BEA) favoured measure of whole economy profits”. While it won’t hit straight away, it is a warning and a bad sign for global stocks which take their lead from the US -the while the Fed’s monetary policy has been holding stocks up so too have increasing profits. More here.

4. Australian interest rates. The RBA left the target cash rate on hold at 2.5% as expected yesterday but there have been some significant changes since the rate cutting cycle during which the major banks routinely failed to pass on cuts of 25 or 50 basis points in full to homeowners. They were citing the higher cost of funding in the post-GFC world. Greg McKenna notes that has now changed – funding costs have fallen – so perhaps it’s time for them to think about opening up some competition and cutting independently of the RBA. What are the chances?

5. GS Elevator is back. John LeFevre has another of his incomparable Goldman Sachs Elevator columns out: the guide to crushing your Wall Street internship. Tips include “Sure, ‘be proactive’ and ‘show initiative’, but don’t let that exuberance make someone else’s life harder in the process,” and “Don’t wear Hermes ties. You have to earn it.” More here.

6. Victoria on the brink. Rogue Victorian MP Geoff Shaw has Spring St in crisis after declaring he would support a no-confidence motion in Denis Napthine’s government if one was tabled by the Labor opposition. Napthine has sworn “not to be held to ransom by some rogue MP from Frankston”. The state has an election due in November but this could bring it on early if the government is defeated in Parliament. Opposition Leader Daniel Andrews is walking a tightrope – bringing on an election now could backfire by infuriating voters – but he has called for a meeting with Napthine and the Governor to resolve what he calls a “constitutional crisis”.

7. Violin pools for everyone. A former Goldman Sachs executive who designed this pool modelled on a Stradivarius he once owned is now in business trying to sell similarly outrageous renovations to other Wall St executives and hedge fund guys, Bloomberg reports. The chin rest is a spa pool and there’s a koi pool shaped like a bow. Who said bankers have no taste?

The violin pool. Photo: NJ Custom Pools

8. Game of Thrones spoilers update. Queen Cersai Lannister is yet again ahead of the game. She posted this on Instagram two months ago (it won’t mean anything if you haven’t seen the latest ep), and her followers are just starting to twig that she’s been doing it for a while now.

9. Innovation nation. Australia’s startup community is always banging on about the “help” they need – mainly from government. SurveyMonkey CEO Dave Goldberg, in Sydney last month, told me he was surprised this kept coming up because in the US, “the government does absolutely nothing”. It’s a fair point but also misses the vast scale differences in the economies and the resultant skills supply that the US enjoys. But there’s a more fundamental question: why should Australia support startups at all? Today in the AFR Telstra CEO David Thodey offers the simplest, clearest reason: because bright, entrepreneurial Australians will simply leave the country and work elsewhere – to places like Singapore and the US – if the conditions aren’t right for them at home.

10. What’s the best time to get to the airport? A US mathematician has analysed the benefits of arriving and waiting around as opposed to dashing through through the doors on time. And he says he has come up with the perfect ideal of what is your time well-spent. Of course, you’ll have to click on the link to find out what that is.

Have a cracking day. I’m on Twitter: @colgo

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