Australian Housing showing further weakness

Since 2016, our structurally bearish thesis on Australian housing has taken a while to play out as cyclical data often managed to hold up as the RBA kept policy loose and as the global economy was awash with liquidity. Now, however, as global-liquidity headwinds are...

Data Confirms Short View on Australian Dollar

We have been bearish on the Australian dollar for structural reasons for most of this year. Iron ore prices fell away in September due to China’s attempts to fight pollution as well as over-supply from Australia. More recently, we have seen coincident data rolling...

Australian Banks: A Shorting Opportunity

The housing-driven downturn we have discussed through last year continues to develop, albeit at a slower pace than we originally expected. The situation is deteriorating, though, with building permits – the best leading indicator for housing – now falling...

Aussie Housing Finance Rolling Over

We are already seeing cracks in the housing market in Australia.  At Variant Perception we track news articles of things in oversupply, as this flags interesting investment themes.  Normally, we’ve seen commodities in oversupply, but interestingly, Australian...

Keep Your Eyes On Aussie Housing Leading Indicators

(from our Tactical from July 14th) We continue to focus on Australian housing leading indicators to help with timing on our structurally bearish Australia outlook, set out in our March thematic Aussie Housing and Banking Boomerang.  Lower rates in Australia are...

Tactical Buy on NZD

(from our Tactical from 2nd of June) We only have one tactical signal this week, a buy on NZD.  The VP Divergence Signal looks at correlations to detect when an asset is trading out of sync with other related global macro assets.  This provides a good short-term proxy...

Morbidly Obese Australian Banks

Australian banks have grown in size hugely in recent years.  Astonishingly, Commonwealth Bank of Australia is the tenth largest bank in the world, despite Australia having a far smaller population than China, the US and the UK – the other countries who have...