The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Monday, August 30, 2010

NAB market summary this morning including Bernanke wrap

This is what NAB had to say this AM:

"** Equities whip-sawed after Bernanke’s comments; falling but clawed back to record solid closes. The Eurostoxx 600 closed up 0.6%, with the FTSE +0.9%, DAX +0.7%, CAC +0.9%; Shanghai up 0.3% Friday. Dow closed up 165 to 10150, +1.7% as was the S&P 500 and Nasdaq. The ASX SPI 200 futures closed up 0.9% Friday night. US (long) bond yields took off after Bernanke didn’t announce more QE, 2s at 0.55% (+3), 10s climbed 17 bps to 2.65%. NYMEX crude up $1.81, +2.5% to $75.17, gold at $1237.90/oz, unchanged. Key base metals higher: copper +2.2%, aluminium +1.7%, nickel +2.9%. Iron ore price +0.6% to $142.90. Softs mostly higher, sugar +3.6%, wheat +0.9%, cotton -0.1%. The AUD initially dipped on Bernanke’s comments but then soared. Range was 0.8863-0.8999; it’s over 0.90 this morning; today’s expected range 0.8870-0.9070

** Europe and US: UK GDP (Q2) reported a surprise upgrade from the flash 1.1%/1.6% to 1.2%/1.7%, so 5% annualised US reported basis; expenditure detail showed consumers supporting growth. US GDP (Q2) revised down but not as much as expected; from 2.4% to 1.6% (1.4% f/c); net exports detracted a huge 3.4% points in Q2, the largest since 1947; Consumer sentiment (Aug, 2nd estimate) shaved down from 69.6 to 68.9

** It was a whip-saw session for markets on Friday night in reaction to the much anticipated speech from Fed Chairman Bernanke at the annual Kansas City Fed conference in Jackson Hole, Wyoming. Bernanke did not announce more quantitative easing (QE) but said the Fed has more QE and other policy tools at its disposal should the economic outlook deteriorate further significantly.

** He held fire on QE even though he acknowledged the weaker-than-expected state of the US economy through the middle of the year. He said that the economy had slowed to a pace “somewhat weaker” than most of the FOMC expected with weak household spending at the epicentre of the slowdown. But he remained cautiously optimistic about the outlook noting that the pre-conditions for a pick-up in growth in 2011 remain in place. The fact he didn’t announce another bout of QE was an initial disappointment for markets, but investors’ nerves were settled by the Fed’s reassurance it stands ready to do more if needed. A smaller-than-expected downward revision to Q2 US GDP also helped with the Q2 weakness in GDP from an abnormally large 3.4% contraction from net exports (from imports); domestic sales were strong at 4.3%.

** It’s a very big week for local data culminating in the release Wednesday of Australia’s GDP for Q2. We have further Q2 pre-GDP partials ahead of that release, including today as well as important partials such as retail trade and a RBA speech."