Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), & CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

5 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he's one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written, yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data & charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, author of the New York Times bestsellers 'End Game' & 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - author of Things That Make You Go Hmmm, one of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, 'MacroBusiness'.

Friday, 21 October 2016

Secret Santa to deliver budget windfall (QLD trade boom)

Windfall for national income

Oil prices hit their highest level since 2015 this week, while there is some talk of prices continuing to recover.

Despite having worked in the resources sector for many years, I don't spend much time trying to second guess commodity prices these days (read: poor track record, lol).

That said, commodity exports are so integral to Australia's fortunes, you really do have to analyse what's taking place to get any real feel for the outlook.

BMI Research notes that it sees "significant potential for an upwards break in Brent towards $60 per barrel".

BMI argues that this is due to "bullish technical drivers and supportive conditions in the broader financial markets".

Counter-intuitively, despite higher fuel prices this would be very good news for Australia as an exporter of both crude oil and natural gas. 

US LNG (gas) futures hit a 22-month high last week hitting levels last seen in 2014, before easing. 

Natural gas spot prices are also trading back at Q4 2014 levels after a horror slump. 

This is timely boost for national income in Australia (and revenues from the port of Gladstone in Queensland) given that LNG export volumes are only now just beginning to ramp up and are expected to triple between 2015 and 2021.

More than $200 billion has been invested in Australian LNG projects over the past decade, and the massive ramping up of production will be a significant boost to both real and nominal GDP growth.

Coal fires

Meanwhile, coal prices are going absolutely bananas.

Coking coal spot prices in particular have exploded from US$72/tonne to US$245/tonne in less than twelve months, for a staggering +240 per cent increase.

More good news for Queensland here, with trade surpluses set to be the order of the day for the Sunshine state.

Source: CBA

Metallurgical coal is Australia's second most valuable export commodity, after iron ore, while thermal coal, LNG, oil, and gold also feature prominently. 

Such a dramatic supply squeeze in the coal sector will never persist for too long, but even so it's becoming a significant windfall for Australia.

Kris Kringle!

Even iron ore is holding up better than expected at close to US$60/tonne, while gold has been the biggest export success story of the year to date.

What a cheeky Christmas bonus gift this will be for Treasurer Morrison!