Good morning. The world’s still reeling from the MH17 crash and there’s widespread anger in Australia at the inability of investigators to get to the site. Let’s start the week…
1. Australian Prime Minister Tony Abbott spoke to Vladimir Putin overnight and pressed for his support in repatriating the bodies of the 28 Australian citizens and the eight permanent residents who were among the passengers on MH17. Abbott said Putin “did say all the right things”, adding he would be speaking regularly to the Russian president to do my best to hold him to his word.” Abbott yesterday described the situation on the ground at the crash site as “outrageous” and has been steadily non-committal when asked about the potential exclusion of Russia from the G20 summit to be held in Australia later this year. US Secretary of State also stepped up the pressure on Putin overnight, saying it was a “very critical moment for Russia to step up publicly and join in the effort in order to make sure there is a full-fledged investigation… so no one will have doubt.” Kerry is also fuming about the situation on the ground, saying “drunken separatists” had been removing bodies from the crash site.
2. Almost 200 bodies from the crash site – almost certainly including some of the Australian victims – were loaded onto a refrigerated train, which was inspected by officials from the Organisation for Security and Cooperation in Europe (OSCE), whose agents have had limited access to the crash site in pro-Russian rebel-controlled territory. The Guardian reports that the train’s destination, after the OSCE officials left, was unknown.
3. An assessment of strategic situation from Deutsche Bank envisions a scenario where the Donetsk rebels prove difficult to control, even with stern intervention from Moscow. This could play a part in a deepening conflict involving possible further economic sanctions on Russia or even an annexation of eastern Ukraine by the Kremlin. In the worst-case scenario, Russia’s relationship with the EU comes into play, bringing with it the potential of gas supply disruption into Europe.
4. The black boxes have been found. Video footage showing rebels recovering what appears to be one of the flight recorders has emerged, and Alexander Borodai, leader of the self-proclaimed Donetsk People’s Republic, confirmed overnight that “Jet parts resembling the black boxes were discovered at the crash site”. He said the equipment would be handed over to the International Civil Aviation Organization. Here’s the clip:
5. The markets recovered in Friday trading, as the circumstances of the MH17 tragedy started to emerge. The S&P 500 recovered most of the losses surrounding the initial news of the crash and the Israeli ground operation in Gaza, to finish up just over 1% on Friday. The Dow gained 0.7% and the Nasdaq was up almost 1.6%. The ASX duly fell and then recovered in Friday trade to finish up almost 0.2%. The futures contract is up 22 points to 5,506 as we head into the start of the week.
6. It’s a quieter data week ahead on Asian markets, although the handful of prints that are out are significant. On Wednesday, we get Australian Q2 CPI, with a Bloomberg survey of economists showing the market expects a rise of 0.5% for the quarter and 3.0% annualised – right at the top end of the RBA’s comfort zone. The quarter takes in the record-breaking warm weather of May, so we may see some seasonal effects in the underlying numbers. Just before that, on Tuesday night, we get US CPI too. Glenn Stevens speaks at the Anika Foundation lunch tomorrow. The big regional data is China flash PMI out on Thursday. More here.
7. The case for a China property crash. Westpac’s respected China watcherPhat Dragon’s latest note takes a look at property prices which were the focus of many traders in the Chinese data releases last week – with prices down more than 9% for the first half of this year. “Prices are under downward pressure across the board, with the negative impulse gaining further strength through June” Phat Dragon writes. “While a more accommodative policy stance will support the sector to a degree, with the aggregate demand-supply position closer to balance than in previous cycles, and the natural ‘buyer on dips’ in a falling market (high-net worth) presently positioned on the sell side, there is more price weakness to come.”More here.
8. Beyonce’s 50 Shades of Grey teaser. Yes, you read that right: the singer released a teaser for the trailer for 50 Shades of Grey, the movie remake of E.L. James’ smash hit book trilogy. Beyonce posted a few seconds of vision teasing the trailer set to a slowed-down rendition of her song “Crazy in Love”. Totally out of the blue. The trailer is out at the end of the week.
9. Here are 15 examples of Steve Jobs being a total jerk, including the time he monstered an old lady who was making him a smoothie.
10. Rory McIlroy is The Open champion. He won the competition by two strokes having taken a six-shot lead into the final day. And there’s a great payoff: 10 years ago, McIlroy’s dad put a 100-pound bet on at odds of 500-1 that his son would win The Open by the time he was 26. McIlroy is 25.