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...

Headwinds for Housing and Autos

Earlier this year we wrote a Thematic piece on autos arguing that we would see auto companies cut prices to move inventory, idle plants and produce fewer cars. We have already seen a slowdown in car sales, and some manufacturers have guided to lower production this...

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...

Higher Yields a Vulnerability for US Housing

Higher US yields are already leading to higher mortgage rates in the US.  Building permits are one fo the best leading indicators for housing, and mortgage rates themselves lead building permits.  The next chart shows the modest recovery in building permits is likely...

More Negative Outlook for the US Economy

Just as the Fed looks like it’s gearing up for its second rate hike in ten years, we get some disappointing news from the US economy.  Building permits in the US, whose growth has been trending down, are now contracting on an annual basis (we look at the 3m average...

Spanish Economy Remains on Cyclical Upswing

For all of Spain’s entrenched structural issues (as we detailed in our April thematic, Spain – Still a Hole in Europe’s Balance Sheet), leading economic data continues to point towards a cyclical recovery in Spain. Real M1 is growing at 15% YoY, consumer confidence is...