Australia housing market revival to continue into 2020: Reuters poll By Reuters


Australia housing market revival to continue into 2020: Reuters poll

By Vivek Mishra

BENGALURU (Reuters) – Australia’s housing market revival will carry on into 2020 thanks to a series of interest rate cuts from the Reserve Bank of Australia this year and another expected next year, according to a Reuters poll of property market analysts.

Respondents were, however, skeptical about how long the rebound would last, with most saying it would only be a year before the rate of house price inflation cooled off again.

The latest Reuters poll of 13 property analysts taken Nov. 6-20 showed average home prices would rise 5.0% nationally next year, nearly double the rate predicted just three months ago, and then slowing to 4.5% in 2021.

Six of 10 analysts who answered an additional question said further interest rate cuts to the record-low 0.75% benchmark cash rate after three RBA cuts already this year would stimulate Australia’s housing market activity and prices significantly.

“Oh, how the story has changed. Six months ago, the key debate among many Australian housing market observers was how much further prices could fall,” noted Paul Bloxham, chief economist at HSBC in Sydney.

“We expect housing prices to continue to rise in 2020, underpinned by mortgage rates, which are likely to stay low for a considerable period of time.”

The RBA is expected to ease once more in 2020 in its bid to boost a slowing economy that has marked nearly three decades of uninterrupted expansion.

All but one respondent in the latest Reuters poll said that Australia’s housing market activity is more likely to rebound over the coming 12 months than decline again.

“Households have responded strongly to regulatory easing and rate cuts. Strong pricing growth particularly in Sydney and Melbourne is likely over the next year,” noted Adelaide Timbrell, economist at ANZ.

A regional breakdown of the poll data showed Sydney and Melbourne, Australia’s two most populous cities which contribute about 43% to the country’s gross domestic product, would lead property price growth in 2020.

House prices in Sydney and Melbourne were forecast to rise 7.7% and 7.4% in 2020, respectively. In Brisbane and Adelaide they were expected to rise 2-3% next year and in 2021.

But analysts were skeptical about how long the sudden revival in Australia’s property market would last, particularly given that the broader economy is still not showing many signs of improvement.

Australia’s wage price index rose 0.5% in the third quarter and consumer sentiment held below average in November, suggesting that recent monetary policy stimulus has failed to spur household demand.

In a Reuters poll taken last month, economists forecast the Australia economic growth to slow to 1.9% this year, the weakest rate since the 1990-1991 recession, followed by 2.5% in 2020 and 2021.

“A strong rebound in household consumption will remain elusive given that the outlook is for income growth to remain subdued in the coming quarters,” noted Katrina Ell, economist at Moody’s Analytics.

China, Australia’s largest offshore property investor, has imposed strict capital controls amid the ongoing trade conflict with the United States. Analysts said that could affect the sustainability of the recent house price recovery.

“Low foreign demand for housing and a weaker economic environment should limit home price growth. Our view is of national home price growth of around 5% after this initial bounce has run its course,” said Diana Mousina, senior economist at AMP Capital in Sydney.

On an affordability scale of 1 to 10, where 1 is extremely cheap and 10 is extremely expensive, Australia house prices were rated 7 by respondents in the Reuters poll.

(Polling and analysis by Vivek Mishra; Editing by Ross Finley and Alexandra Hudson) OLUSECON Reuters US Online Report Economy 20191122T000819+0000



The battle for China’s meatless market By Reuters


© Reuters. Staff member displays a burger with a Beyond Meat plant-based patty at VeggieWorld fair in Beijing

By Pei Li and Brenda Goh

BEIJING/SHANGHAI (Reuters) – U.S. plant-based “meat” makers targeting China like Impossible Foods and Beyond Meat Inc (O:) will need to battle homegrown rivals which are developing local favorites such as dumplings and mooncakes to nab a share of the lucrative market.

China’s meat substitute industry has seen a surge in interest in recent months, with startups, traditional food businesses and investors betting trend-loving Chinese consumers will take to plant-based protein like their U.S. counterparts.

A devastating pig disease and bruising Sino-U.S. trade war that have combined to push up meat prices are also playing a role.

Among the new players are names like Zhenmeat and Starfield, while long-time plant-based companies including Whole Perfect Food are rolling out new products.

Ham producer Jinzi Ham (SZ:) saw its share price soar 50% in a week after it announced in October it would start selling meat made out of plant protein that it developed with Danisco (China) Investment, a unit of U.S. firm DuPont (N:).

Local firm MYS Group (SZ:) has also announced it is conducting research into similar products.

But unlike Impossible Foods or Beyond Meat, most Chinese companies are not making burgers, instead focusing on local dishes such as dumplings, mooncakes or meatballs, and opting for pork rather than beef flavors in recognition of local palates.

“American and European companies have rich experience in frying, roasting, and baking, we have a different dieting culture and cooking recipes,” said Zhou Qiyu, a marketing executive at Whole Perfect Food.

LOCAL TASTES

One-year-old Zhenmeat, whose name translates to “treasure meat”, for example, was touted by Chinese state media as the country’s answer to Beyond Meat after it used “meat” made out of pea-based protein in its mooncakes, a popular snack eaten during the country’s Mid-Autumn Festival.

Zhenmeat’s co-founder Vince Lu said the company, which has partnered up with noodle manufacturer Yantai Shuangta Foods (SZ:), was looking into making meatballs and dumplings.

“We are analyzing the flavoring behind pork meat, and we are taking on that to make a difference between our competitor from the U.S.,” he said.

Whole Perfect Food, which for the last 20 years has mainly catered to China’s mostly vegetarian Buddhists, recently rolled out a range of sausages made from soy and pea-based protein. The sausages come in 40 varieties, including spicy Sichuan and soy-seasoned beef.

Zhou said the firm was open to working with foreign companies. It had earlier this year conducted a trial partnership with Walmart (N:) which has since ended but has partnerships with Alibaba Group Holding’s (N:) Hema chain and Tencent-backed (HK:) retailer Yonghui Superstores.

China’s “free from meat” market, which includes plant-based products meant to replace meat, has grown 33.5% since 2014 to be worth $9.7 billion last year, according to Euromonitor. It predicts that the industry will be worth $11.9 billion by 2023.

Impossible Foods has identified mainland China as its No.1 overseas market for future expansion and says its Impossible Burger product can we easily adapted for use in Chinese cuisine.

This month showcased the use of its plant-based meat in dishes such as “Impossible Lion’s Head Dumpling in Broth” at a high-profile Shanghai import fair. It says it is developing prototypes of many different products including pork but has no immediate plans to commercialize them.

“We have tons of inbound interest. They are just waiting for us to get clearance to sell in China,” said its CEO Pat O. Brown, when asked if Impossible Foods had been meeting with retailers and restaurants.

Beyond Meat’s executive chairman Seth Goldman told Reuters it plans to customize its pea-based meat for the Chinese market to make dumplings and other products. The company is aiming to start production in Asia by the end next year before eventually expanding to China.

“It’s the same palate. There’s nothing about what we’re doing that prohibits us from making a product that would have appeal in the Chinese market,” he said.

TASTE IS KING

China is no stranger to food using vegetarian ingredients to give a meat-like flavor, for years consuming tofu and similar “mock meat” products made out soy beans.

Matilda Ho, managing director of Bits x Bites, a Shanghai-based food tech venture capital fund, says first and foremost, companies will need to make products tasty to shift consumers from real meat.

“If you simply use pea protein, or soy protein, and then add a lot of additives to make them stick together and then sell to the market, there is no real innovation, the taste is really bad, from a consumer perspective, we don’t believe the demand will be able to meet that oversupply.”

Textures are also key, said Zhang Xinliang, founder of six-year-old plant-based meat manufacturer Ningbo Sulian Food, citing differences between Chinese and Western cooking.

“The texture of Yangzhou-style meatball is very dimpled, while hotpot meatballs are crispy,” he said. “Foreign plant-based food might not succeed in China because they don’t fit Chinese stomachs.”

SWINE FEVER FACTOR

The sheer size of the market means ample opportunities are likely, and the timing looks good.

China is currently grappling with surging prices for pork, its mainstay meat, after culling an estimated half its herd due to an epidemic of African swine fever. A bruising trade war with the United States has also raised prices of beef and other meat products.

“We believe this is a huge driver for the trend of plant-based protein happening in China, but again, it’s slow,” said Ho of Bits x Bites.

Producers can rely on demand from younger Chinese consumers, many of whom are avid followers of food trends and love to try new cuisines.

Among them was 23-year-old Liu Dongyang, a vegetarian who traveled 160 km (100 miles) from her home in Guangzhou to try Impossible Foods’ meatless burger patty in Hong Kong.

She says the buzz over plant-based trend has sparked an interest in vegan diets from her meat-eating friends.

“My friends used to think vegetables and meat are completely different kinds of food. But now when we go to restaurants that serve plant-based food, they are very delighted and interested.”



Saudi Aramco will not market IPO in the United States: sources By Reuters



DUBAI (Reuters) – Saudi Aramco does not plan to market its domestic initial public offering (IPO) in the United States, two sources familiar with the matter said.

Aramco had said in its IPO prospectus earlier this month that the offering of shares would rely on the 144A rule of the U.S. Securities Act, which allows a non-U.S. issuer to tap the U.S. market.

The sources said Aramco will no longer rely on that rule, meaning it will not market the shares in the United States.

Aramco did not immediately respond to a comment request.

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U.S. charges another ex-JPMorgan executive with alleged market manipulation By Reuters


© Reuters. FILE PHOTO: A general view of the Department of Justice building is seen ahead of the release of the Special Counsel Robert Mueller’s report in Washington

NEW YORK (Reuters) – The Department of Justice has charged another former JPMorgan Chase & Co (NYSE:) executive with alleged racketeering and manipulating precious metals prices between 2008 and 2016, the latest in a string of similar prosecutions.

The indictment against Jeffrey Ruffo, who is also charged with other federal crimes including conspiracy to commit wire fraud, is the result of an “ongoing investigation”, federal prosecutors said in a statement.

Ruffo is the sixth person to be charged with alleged fraud in connection to JPMorgan’s precious metals desk.

The case relates to spoofing, which involves placing bids to buy or offers to sell contracts with the intent to cancel them before execution, allowing spoofers to influence prices. In recent years there has a been a surge in spoofing related prosecutions in the United States by the Department of Justice and the Commodity Futures Trading Commission.

Ruffo could not immediately be reached for comment.

A JPMorgan spokesman did not immediately respond to a request for a comment. The U.S. bank has said in recent regulatory filings that it is cooperating with various investigations relating to its metals trading practices.

According to the indictment, Ruffo worked at JPMorgan from 2008 to 2017 as a salesperson serving hedge funds investing in precious metals and he encouraged JPMorgan traders to place deceptive orders to create price advantages for his clients.

The indictment also alleged that Ruffo and his former colleagues defrauded JPMorgan’s clients who had invested in “barrier options” by pushing option prices to levels that benefited the bank.

An option is a financial instrument that gives buyers the right to buy or sell an underlying asset at an agreed price and at a fixed time. Its value is tied to the value of the asset.

While previous spoofing prosecutions have led to guilty pleas, a former metals trader at the Swiss bank, UBS Group, was acquitted by a jury in a similar case last year. The acquittal highlighted the difficulties in making a case that cancelling orders is a criminal act, given that many market orders go unfilled.

Some lawyers also argue it is aggressive to charge bank executives with a racketeering conspiracy, which is usually associated with organized crime.

The charges were filed on Thursday and made public on Friday.

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Gold Prices Test Lows Again as Market Awaits Trump Speech By Investing.com


© Reuters.

Investing.com — Gold prices edged lower on Tuesday ahead of a keynote speech by President Donald Trump at 12 PM ET (1700 GMT) that is widely expected to set the tone for risk appetite this week.

Trump is due to address the Economic Club of New York in a speech that should enlarge on his thoughts about the trade dispute with China and – more immediately – whether his administration will decide whether or not to impose import tariffs on European autos. The official deadline for that latter decision is Wednesday.

European Commission President Jean-Claude Juncker and Commerce Secretary Wilbur Ross both raised hopes that tariffs would be avoided with comments last week. As such, the reaction function of haven assets may be skewed to the upside, given that consensus is for an outcome that would be bullish for risk assets.

By 10:55 AM ET (1555 GMT), for delivery on the Comex exchange were down 0.4% at $1,451.35 a troy ounce, having earlier again tried and failed to break out below the $1,450 level.

was down 0.3% at $1,450.99 an ounce.

There was little support from the bond market. Short-dated Treasuries, the most liquid alternative haven, have all but priced any further interest rate cuts from the Federal Reserve in December out of the equation. U.S. yields were flat at 1.67%. A rise of nearly 30 basis points in two-year yields since early October has greatly enhanced bonds vis-à-vis non-yielding gold.

Silver also extended its recent losses, the contract falling 0.8% to $16.67 an ounce, while fell 1.2% to $869.80.

“The mood toward precious metals has darkened significantly in the last two weeks,” said Commerzbank (DE:) strategist Christoph Geyer in a research note. “Important support levels and trends have been broken. It’s no longer a question of when new highs will be made, but whether the next support level can be held.”

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Oil prices gain as market awaits signals on U.S.-China trade talks By Reuters


© Reuters. A pump jack on a lease owned by Parsley Energy operates in the Permian Basin near Midland

By Aaron Sheldrick

TOKYO (Reuters) – Oil prices rose on Tuesday, reversing early losses on hopes that U.S. President Donald Trump may signal progress on trade talks with China in a speech later in the day.

futures were up 31 cents, or 0.5%, at $62.49 a barrel by 0644 GMT, after dipping to as low as $61.90 earlier in the day.

U.S. West Texas Intermediate (WTI) crude was up 23 cents, or 0.4%, at $57.09 a barrel, having fallen to $56.55.

Worries about the impact on oil demand from the fallout of the 16-month U.S.-China trade war, which has weighed on global economic growth, sent prices lower on Monday.

Trump said on Saturday that talks with China were moving along “very nicely” but the United States would only make a deal if it was the right one for Washington. He also there had been incorrect reporting about U.S. willingness to lift tariffs.

Trump speaks to the Economic Club of New York later on Tuesday, and markets will be keen for any update on the talks.

“Positive commentary about a possible U.S. and China interim trade deal certainly helps, but the fundamentals are supportive,” said Virendra Chauhan, Oil Analyst at Energy Aspects in Singapore, pointing to an improved demand outlook.

“Six million barrels per day of refining capacity is due to return from turnarounds across November and December,” he said.

On the supply side, Goldman Sachs (NYSE:) also cut its 2020 forecast for growth in U.S. oil production, which has surged in recent years.

The investment bank cut its growth forecast for next year by 100,000 barrels per day (bpd) to 600,000 bpd over 2019.

“We expect U.S. oil growth to decelerate into 2020 as many companies look to balance growth with capex,” Goldman Sachs said.

Elsewhere, U.S. data showed that crude inventories at Cushing, the delivery point for WTI, fell about 1.2 million barrels in the week to Nov. 8, traders said, citing market intelligence firm Genscape.

Cushing inventories had grown for five weeks in a row through Nov. 1, according to government data.

Demand growth may pick up in 2020 after a year of dashed expectations amid the U.S.-China trade war, Fitch Solutions Macro Research analysts said in a new report.

“Our data show that 2019 will mark the nadir of oil demand growth over the next five years,” Fitch Solutions said.

“We forecast demand to (grow) by around 0.5% this year, rising to 0.8% in 2020,” the report said, although it added that “trade and political risks remain extremely elevated.”



China’s NEV market may contract this year due to subsidy cut: industry association By Reuters


© Reuters. FILE PHOTO: Carrier trailer transports newly manufactured cars at a port in Dalian

By Yilei Sun and Brenda Goh

BEIJING/SHANGHAI (Reuters) – Fewer new energy vehicles (NEV) could be sold in China this year than in 2018, an official at the country’s biggest auto industry association said on Monday, as customers hold back on purchases following a government decision to cut subsidies.

Chen Shihua, assistant secretary general at China Association of Automobile Manufacturers (CAAM), made the comment on Monday after the association reported that sales of NEVs fell 45.6% in October from year-ago levels, following a 33% decline in September.

“There is a gap between sales to date and where they were last year, so according to the development trend, we may see negative growth for new energy vehicles this year,” he said.

China has been a keen supporter of NEVs and has implemented sales quota requirements for automakers. But it cut subsidies for NEVs this year as part of an overall plan to reduce subsidies, making the vehicles costlier.

Prior to the subsidy cut, the market for NEVs – which include plug-in hybrids, battery-only electric vehicles and those powered by hydrogen fuel cells – had been a bright spot, having jumped 62% last year.

While NEVs sales rose last year, the world’s largest auto market suffered its first contraction since the 1990s last year.

The trend has remained discouraging with auto sales falling for a 16th consecutive month in October, declining 4% from the same month a year earlier, and followed declines of 5.2% in September and 6.9% in August, CAAM said. September and October, known as “Golden September, Silver October” by China’s auto insiders, are regarded as the high season for sales, with customers traditionally returning to make purchases after the summer. The decline in sales during the high season has dealt a blow to industry executives’ hopes for a turnaround in the second half of this year. As recently as three years ago, automakers had enjoyed double-digit annual growth in China. But the prolonged sales decline has made domestic car makers from Geely (HK:) to Great Wall (SS:) lower their expectations for sales and profit.

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Cracks in UK labour market grow as demand for staff fades: REC By Reuters


© Reuters. Cracks in UK labour market grow as demand for staff fades: REC

LONDON (Reuters) – British employers’ demand for staff grew in October at the slowest rate in almost eight years, a survey showed on Friday, underlining suspicions at the Bank of England that the labour market may be losing its strength.

A monthly index of jobs vacancies from the Recruitment and Employment Confederation and accountants KPMG fell to 51.7 from 52.6 in September, its lowest level since January 2012.

On Thursday, two of the BoE’s nine interest-rate setters unexpectedly voted to cut interest rates, citing signs that the labour market – the bright spot of Britain’s economy since the Brexit vote – may now be on the turn.

Friday’s REC report – which is monitored by the BoE – showed permanent job placements fell for an eighth month running and at a faster rate than in September, chiming with official data which showed job creation waning ahead of the aborted October Brexit deadline.

James Stewart, vice chair at KPMG, said uncertainty around Brexit and a national election scheduled for Dec. 12 had dampened companies’ hiring plans.

“It’s not just businesses that are being cautious, however, and over October we’ve seen job-seekers become increasingly nervous about making a career change,” said James Stewart, vice chair at KPMG.

The survey showed starting salaries for permanent staff rose at a solid pace in October, albeit more slowly than in September.

In a new set of forecasts for the economy published on Thursday, the BoE said it thought pay growth in Britain – which recently hit a more than 10-year high – was likely to cool off a little in the coming year.

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Are Bitcoin and Other Cryptos Back in a Bear Market After Latest Drop? By Cointelegraph


© Reuters. Are Bitcoin and Other Cryptos Back in a Bear Market After Latest Drop?

On Nov. 8, corrected from $9,200 to $8,650, causing the market sentiment to shift from greed to fear once more.

The correction came after one of the biggest surges in the history of Bitcoin (BTC), which makes the sentiment shift curious. Let’s take a look at the market overview and analyze the charts.

Continue Reading on Coin Telegraph

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Canada unexpectedly lost jobs in October as labor market stagnated, unemployment rate steady at 5.5% By Reuters


© Reuters. People wait in line for resume critique and career assessment sessions at 2014 Spring National Job Fair and Training Expo in Toronto

By Kelsey Johnson

OTTAWA (Reuters) – The Canadian job market stagnated unexpectedly in October, losing 1,800 net positions, while the unemployment rate remained at 5.5%, Statistics Canada said on Friday, as employment declined in the manufacturing and construction sectors.

Analysts in a Reuters poll had forecast a gain of 15,900 jobs in October and an unemployment rate of 5.5%. Wages for permanent employees rose by 4.4%, Statscan said.

Canada lost 16,100 full-time positions last month, but gained 14,300 part-time jobs. The number of self-employed workers in October fell by 27,800.

The Canadian dollar weakened to a three-week low of $1.3232 to the U.S. dollar, or 75.57 cents U.S., after the jobs data was released.

“It definitely runs against the grain of very strong job gains we’ve seen through most of the past year,” said Doug Porter, chief economist at BMO Capital Markets, noting there was likely a “small, temporary boost” because of hiring tied to last month’s national election.

“We have to be cautious about reading too much into any one report, but it shows that the economy is not simply on a one-way trip north here,” Porter said.

Canada’s central bank, which has not moved since October 2018 even as its counterparts – including the U.S. Federal Reserve – have eased, held firm as expected last week, but left the door open to a possible future cut to help the economy weather the damaging effects of global trade conflicts.

The Bank of Canada said it would monitor “the extent to which the global slowdown spreads beyond manufacturing and investment” going forward while watching domestic data.

“I don’t think one number will move the needle a whole lot at the Bank of Canada, but at the margin it’s a little bit more of a cautious signal,” Derek Holt, vice president of capital markets economics at Scotiabank, said of the jobs report.

Statscan said the services sector gained 39,000 jobs in October, with increases reported in public administration, as well as finance, real estate, insurance and rental leasing industries, while the goods-producing sectors saw a decline of 40,900 jobs on losses in manufacturing and construction.

The country’s manufacturing sector lost 23,100 jobs in October, mostly located in Ontario, while the construction sector lost 21,300 positions across five provinces, Statscan said.

In a separate release, Statistics Canada said the value of Canadian building permits dropped by a larger-than-expected 6.5% in September to C$8.3 billion ($6.28 billion) because of declines in the residential sector.