Pete Wargent blogspot


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Monday, 3 February 2020

Another fine mess

Bond boom

It's not easy to find much positive to yack about at the moment, with 2020 getting off to a real stinker. 

The Aussie manufacturing gauge from AiG plunged to 45.4 (from 48.3 in December), with AiG warning of worse to come. 

Delta Airlines is suspending flights from the US to China until the end of April, due to the coronavirus, while American Airlines is out of action until the end of March.

It's tricky to get a handle on how reliable the reported figures are, but clearly the virus is being treated as a very serious risk, lest it become a pandemic.

Australia's economy has massive exposure to China via resources, tourism, international students, and more.

Chinese oil demand is thought to have collapsed by 20 per cent. 

Are we therefore heading for a period negative growth?

The Aussie dollar is in freefall, and meanwhile here go bonds, with the 3-year hitting a record low of 0.56 per cent, and the 10-year following suit...