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Morning all,

Great first test last night. The game had everything and shows why Test Cricket is still the one. Even the dollar joined in with the disappointment with the result by briefing falling below 90c cents….suspect the Cricket was the real reason but some commentators suggested it was Chinese GDP expectations..I will go for the Cricket reason..anyway today we find out as the GDP fact or fiction number comes out from China…one official suggested sub 7% but they have quickly moved to change that forecast and target to the 7.5% one from previous commentary…

Expect a cautious day today with the GDP the focus…feel like we may need to pull back a bit to consolidate before another run at 5000…think we may see more fun out of the oversold resource sector especially if the dollar slips below 90 again..it is psychologically significant..speaking to an FX trader mate of mine with a big banks he was saying that they have seen a  lot of long term core holders of the Aussie exit recently…these are rusted on bulls of the Aussie getting out..85 cents a real possibility but he thought the big move had happened..but still at 85 cents the local economy will look a little different… Amazing to think that our market has rallied nearly 8% since Kev 13 came back…can’t keep going at this pace..consolidation perhaps necessary.

Idea of the Day

Maybe it’s time! Maybe it’s time for Gold to show some strength…this next three months is traditionally the best period for the yellow stuff…Since 87 Gold has rallied on average 0.14% in August and nearly 2% in September .And we have already had a 7% gain in July ..so time to look again at Golds perhaps..they have all been smashed but maybe the next quarter will be better..if you own them..hold on and maybe average a little and if not maybe time to have a look…Gold has gone up in the last 10 out of 12 September quarters…

My call to buy NCM under 10 bucks the other day would have paid off handsomely now they are 12…any weakness is worth looking at here..plenty of other beaten down golds to look at too..the list goes on!!! KCN,SLR,SBM,RRL,EVN,MML,BDR…anyway you get the idea..Sept quarter good for Gold..good for Gold stocks…they have big leverage to the price moves!

Things to make me go all Jimmy Anderson!!

Kev13 has turned things around for Labour…its now a 50/50 race and Abbott will be under pressure now. Maybe we will see some more from Turnbull or his supporters…back to the future really!!You can still back Malcolm at $7.50 to lead Liberal at next election!

How many times have we heard this eh? Australia’s banks: have the highest exposure to residential mortgages of any financial institutions in the world, leaving them vulnerable to a “looming” house price correction, a leading credit market economist has warned. Tony Hughes, the managing director of Moody’s Analytics….the looming house price correction? Really, you sure about that!!

BHP Billiton, Rio Tinto, Woodside Petroleum, Santos, will all report production, and energy firms revenue, from what has been a weaker quarter than it could have been from the nation’s resource-rich Pilbara in WA. Rio and BHP experienced a very wet dry-season month of June in the Pilbara. This is understood to have affected production from Rio, which reports tomorrow, and is likely to drag down its regional production, including minority partners’ interests, by a couple of million tonnes from the 61 million analysts had forecast

Billagone’s Americas boss Colin Haggerty boasted that he had been constantly revising his revenue and earnings forecasts upwards since taking control of the division in December. “We’ve just finished our year-end and our sales number has been achieved in Canada, the US and South America; it’s also been achieved in wholesale, retail and e-commerce,” “e-commerce channel has grown by 155 per cent year on-year and it’s profitable”

Spain seems to be in the grip of a major political bribery scandal, Portugal still has problems in its Government and Greece is finalising plans to sack another 15,000 civil servants with 25,000 more to folllow…great for confidence and those jobless numbers..will the last one out of Southern Europe please turn out the lights!!And with the German election only 10 weeks away Zombie land is on notice NOT to rock ‘Das Boot’ for Moaning Mertle…she wants another 4 years to take over the rest of the region.

In still in Greece, The tax crimes squad conducted 841 checks on June 21-24 on companies in tourist areas including Santorini, Mykonos, Rhodes and Skopelos. Of that number, 381 were found to be breaking tax rules for a total of 822 infringements, such as not issuing receipts, not paying sales tax, not registering visitors at hotels or not registering employees.And that my friends is the problem!!

On Bastille Weekend and the 100th anniversary of the Tour de France, you know it must be bad when the French-company-owned ratings agency Fitch is forced to remove its AAA rating from France. Key drivers include Debt-to-GDP projections rising and substantially weaker economic output and forecasts. Vive la difference, n’est pas?

Few things to watch for this week.. Tuesday: RBA minutes from July board meeting Wednesday: Wesptac leading index for May Thursday: NAB business confidence for the second quarter, RBA foreign exchange transactions for June

Not sure if the Finance minister is going to be around that long if he keeps saying these sorts of things!!China’s official Xinhua News Agency corrected a report that cited Finance Minister Lou Jiwei as saying the country’s growth target this year is 7 %, a figure lower than the official goal of 7.5 % set in March.In an English-language story released today and dated yesterday, Xinhua said it corrected a quote attributed to Lou to “there is no doubt that China can achieve this year’s growth target of 7.%” from its original story dated July 11 that cited him as saying “there is no doubt that China can achieve the growth target, though the 7 % goal should not be considered as the bottom line.”

And still on China, it made progress in curbing shadow banking in June and slowed money-supply growth, as Premier Li Keqiang seeks to rein in the credit boom that poses risks for the nation’s financial system. Data for aggregate financing, the broadest measure of credit, showed new yuan loans played the biggest role since September 2011, with non-traditional sources of finance less prominent. M2 money supply rose 14 %, down from 15.8 % the previous month, People’s Bank of China numbers showed in Beijing yesterday.

Meanwhile in the US, the duelling banjos Fed Chiefs continues with Dullard and Plosser both playing opposites..one wants tapering now ,one cheap money forever…this could get interesting!! But still the ….

S&P managed its best week in 6 months (+2.6%); Gold’s best week in almost 8 months (+5.1% or $62); Treasuries’ best week in 13 months (10Y -14.5bps); High Yield bonds best week in 20 months (+3%); and the USD’s equal worst week in 21 months (-1.8%).

And finally…. A lawyer boarded a Jetstar flight in Perth , with a box of frozen crabs and asked a blonde stewardess to take care of them for him.. She took the box and promised to put it in the crew’s refrigerator.

He advised her that he was holding her personally responsible for them staying frozen, mentioning in a very haughty manner that he was a lawyer and proceeded to rant at her about what would happen if she let them thaw out. Needless to say, she was annoyed by his behaviour.

Shortly before landing in Sydney , she used the intercom to announce to the entire cabin,

“Would the lawyer who gave me the crabs in Perth , please raise your hand?”   Not one hand went up … So she took them home and ate them.

Two lessons here: 1. Lawyers aren’t as smart as they think they are.

2. Blondes aren’t as dumb as most folk think.

Have a great day

Clarence XXX


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 Any financial product advice contained in this email is general financial product advice only and does not take into account any one person’s objectives, financial situation or needs. Therefore, before acting on any financial product advice in this email, you should consider, with or without the assistance of an independent adviser, the appropriateness of the advice, having regard to your objectives, financial situation and needs