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Published on: Friday, July 07, 2017

By James Dunn

Australia’s annual exports to China hit a record high in May, at US$95.1 billion, up 26.8% on a year ago. Exports to China accounted for 33.2% of Australia’s total exports, a 34-month high (the record is 33.7%). Australia’s annual imports from China rose to a nine-month high of $60.7 billion in the year to May, but are down 1.1% for the 12 months. Imports from China accounted for a record 23.1% of Australia’s total imports. Australia’s exports to India hit a five-year high, totalling $14.2 billion in the year to May, up 46% on the year.

Japan’s inflation rate has edged up for the fifth straight month, but it’s still a long way short of the Bank of Japan's target of 2%. The country’s consumer price index, excluding the price of volatile perishables, rose 0.4% in the year to May, to 100.3. Japan has been battling for years with low inflation, which tends to go together with tepid economic growth. Inflation would be a by-product of an expanding economy, and would also help Japan reduce the burden of its enormous government debt (about 90% of which is held domestically). But more than four years of aggressive monetary easing has done little to cure deflation, with companies still reluctant to raise prices of goods and services.

The oldest US stock-market indicator may have just sent a fresh ‘buy’ signal, with the Dow Jones Transportation Average – known as the “Dow Transports” making a record high this week. Although the Dow Transports is older than its sibling, the Dow Jones Industrial Average (DJIA), it is far less widely known – but it plays a crucial role with the DJIA in the famous Dow Theory market-timing model of the early 1900s. This theory holds that when both the Dow Transports and the Dow Industrials are making new highs, the bull market is alive and well. The Dow Transports had gone more than three months without hitting a new high, until this week – at the same time the Dow Industrials also traded at fresh new all-time high.

Global mergers and acquisition activity (M&A) rose by 8.4% in value in the first half of 2017, to US$1.49 trillion ($2 trillion), despite 1,117 fewer deals (down 12.1%) from the 9,169 deals in the same period last year, according to Mergermarket. There were 17 megadeals (greater than US$10 billion [$13.1 billion]) announced in the first half of the year, versus 14 such deals in H1 2016. In Asia-Pacific (excluding Japan), the Energy, Mining & Utilities (EMU) sector was the most active sector in the region with US$45 billion ($59.2 billion) worth of deals across 136 transactions, representing 16.5% market share by value in H1 2017. Australia outperformed all other countries in Asia by value with over 50.4% of EMU deal-making in the region, totalling 31 transactions worth US$22.6 billion ($29.7 billion). Three of the top five EMU deals in Asia featured Australian targets, including the acquisition of a 50.4% stake in New South Wales electrical distribution network Endeavour Energy for US$5.6 billion ($7.4 billion), by a Macquarie Group-led consortium, in May. In the region, Macquarie Group was the top financial advisor, with a deal value of US$20.8 billion ($27.4 billion), and had the most deals, with 17.

Australia has been bumped from the gold medal in the World Steak Challenge, with 2015 and 2016 winner Jack’s Creek Wagyu, losing its crown to a Polish entrant, which served up a grain-fed Limousin cross sirloin steak. But the New England-based Jack’s Creek still came away from the London event with a swag of awards for its Wagyu, including gold medals in the grain-fed eye fillet category and a second gold in the grass-fed striploin category, plus a silver in the grain-fed rib-eye category. The competition featured more than 100 entries from 17 countries.

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