FMG Technical Analysis, page-4089

Hi PB,

The AUD being the second biggest contributor to profit after the IO price won’t be going north anytime soon I believe.

I wrote some analysis on the labour market today on LinkedIn (I’ve done more extensive analysis but I’ll just put up summary) which I’ll put here as highly relevant to the profit we make in AUD. Ie at 0.80, we multiply USD profit by a factor of 2.5. At 0.667, it becomes a factor of 5.

The factor of 5 will be in play for some time yet.

Therefore USD profit of 2B for example will be closer to AUD 3B rather than A2.5B...



....


The Australian Labour Force Commentary for October 2019 was released by the ABS today.


The numbers were subdued with both PT & FT employment numbers lower than September.


The concerning statistic is that the employment capacity utilisation index dropped to 53.14% in October from 53.28% in September.


In simple terms, this means the no of hours collectively we are working in Australia is only at 53.14% of what we potentially could be working if at full capacity. This has been steadily declining despite the unemployment rate at 5.3%.


The mix of following factors will make it increasingly difficult to increase the reading of the above index & therefore real GDP (without higher productivity or more debt..):

- Already low unemployment rate of 5.3%;

- The trend of nearly 50% of people employed since October 2011 done so on a PT basis. The current weighted % of people employed PT is only 31.62%;

- Even though more people are employed PT, the PT hours being worked have been trending less for some time (see table below);

- An ageing & growing population as this dilutes the reading (see below link)


https://lnkd.in/eVjb6D7