Australia Focus : Crush and Crushed, Wallabies and Kangaroos

I admit, I am not the sports fan to sit patiently through a televised game but I do like to follow the headlines and so we Australia keeping their hopes alive for winning the Bledisloe Cup from NZ for the first time in 13 years today but trailing at The Ashes, 1-3 behind England.

The Wallabies (rugby) and The Kangaroos (cricket).

The other big news for investors today –  Australia Treasurer Orders Sale of Six Foreign-Owned Homes. http://www.theguardian.com/australia-news/2015/aug/08/joe-hockey-orders-sale-of-six-residential-properties-owned-by-foreign-nationals

(Bloomberg) — Properties held by five different investors from four countries, Joe Hockey says in e-mailed statement.

  • Purchase prices range from A$152,000 to A$1.86 million
  • Properties located in suburbs of Perth, Brisbane and Sydney
  • Investors came forward under government amnesty policy; have 12 months to sell, as opposed to three months for non-amnesty cases, and won’t be referred for criminal prosecution
  • Govt. has 462 cases under investigation, expects to announce more divestment orders: Hockey

“A company owned by Chinese billionaire Hui Ka Yan’s Evergrande Real Estate Group Ltd. — which illegally bought a A$39 million mansion overlooking Sydney Harbour — has sold the site to an Australian citizen”, this was back in May.

Housing is the big topic this week other than internal politics where Prime Minister Abbott is facing backlash from quite a few fronts including a travel expense scandal involving the speaker of the parliament and for taking a foreign corporate’s side in a judiciary decision to overturn approval for the largest coal mine.

RBA comes to the rescue like I thought they would.

“I think there is a small case for a doji-induced uptick, don’t you think ?” https://tradehaven.net/market/fx/australia-focus-still-the-best-place-to-live/

And so it worked and the AUDUSD comes out tops this week amongst all recognisable currencies in the world, rising 1.5% against the USD as the RBA, on Tuesday,  omits to mention that the currency is overvalued, for the first time in 18 months !

Adding to that, we have iron ore imports by China climbing to their highest level this year. I say, we have some room to breathe as Australia turns their attention to their housing woes led by eastern states with Sydney prices soaring to their biggest gain in 13 years.

Yes, Moody’s says that the overheated property market is a key risk to the Australian banking system as analysts warn that Western Australia real estate could be due for a regional collapse. And the central bank warning too.

(Bloomberg) — There will be periods when house prices fall, Reserve Bank of Australia’s head of financial stability department, Luci Ellis, tells parliamentary committee hearing in Sydney.

  • “We actually anticipate that nominal price growth will be slower on average than it was over the 15 years to 2005 and certainly than it was over the high-inflation period” prior to that.
  • More likely to have brief periods when house prices fall and “people do have to bear in mind that risk”

I think the country has plenty of bullets left, if they want to, now with the lobby over the capital gains tax rethink and of course, the foreign property ownership rules and not to mention the asset sales lined up.

It just tells me – No rush ! AUDSGD back at 1.02 but a wallabie is not a kangaroo and I like to see the AUDUSD back at 0.76 before I revisit the prospect.

AUD UPDATE

Credit news :

*MOODY’S UPGRADES QANTAS’ SR UNSECURED RATINGS TO Ba1; AFFIRMS OUTLOOK POSITIVE

*FITCH CUTS ORIGIN ENERGY TO ‘BBB’; OUTLOOK STABLE

*MOODY’S PLACES ORIGIN ENERGY RATINGS ON REVIEW FOR CUT

Leaving with the indicative prices (mostly lower).

aud bonds