RBA change: housing concerns ease, commercial property concerns rise. Has the Reserve Bank’s twitchiness on the impact of rising housing prices — evident in last September’s board meeting minutes and Financial Stability Review later that month — eased and switched to commercial property? Judging by the change in sentiment and words in the March 3 minutes from the RBA, compared to those from the September meeting (both sets of minutes contain summaries of the soon-to-be released Financial Stability Reviews), that seems to be the case.

While the RBA remains concerned about house prices, especially in Sydney, it is definitely getting toey about commercial property (“risks are beginning to build”), which has long been watched by the RBA and its co-regulator, the Australian Prudential Regulatory Authority because of the sector’s track record in producing nasty crunches and crashes for banks and other financial entities (commercial property collapses almost destroyed Westpac and the ANZ in the recession of the early 1990s, and brought down the state-owned banks in Victoria, South Australia and WA).

But apart from these two areas, the minutes yesterday were fairly sanguine about the rest of the financial system, saying “outside of commercial property, risks to financial stability from the non-financial business sector generally appeared low and failure rates had been declining” and “the major banks continued to accumulate capital organically, leaving them well placed to meet any further increases in capital targets in the period ahead”.

And then there’s the little throw-away line at the bottom of this section in the March minutes, which reads: “Members were briefed on recent developments in international regulation, including macroprudential measures announced in a range of countries over recent years.” That alludes to moves in countries such as New Zealand, the Nordic countries and the UK to control and direct house prices and lending. Is the RBA getting ideas for future action? — Glenn Dyer

Truth in management #431. Just a few words in a statement this morning from Orica. The mining-services company has told us more than many companies have done about the management style of their CEOs. This morning’s statement announced that Ian Smith, the Orica CEO, was departing after having whipped the company into shape. Chairman Russell Caplan though said more in this comment in the statement: “The Board and Ian agree that this is an appropriate time to move forward with transition to a new leader with a different management style who will consolidate and build on the foundations that have been laid.” Hmmm, “different management style”. Well, if the flow of senior executives out of Orica during his tenure is any guide, Smith has a reputation for being confrontational, a bit of a headbanger. Not that the board is complaining, judging by this statement in this morning’s release: “The Board set Ian a challenging brief and a demanding timeframe to lead a vigorous top-to-bottom transformation of the company. As a result, Orica today is a stronger, more resilient company.”

Smith started at Orica in February 2012, when the Orica share price averaged $25.66. It closed at $19.21 yesterday — a huge loss in value, around 25%. There have been a number of reasons for that slide, namely the impact of the strong Aussie dollar and the slide in resources, especially coal and iron ore, which uses a lot of Orica’s explosives and other products. — Glenn Dyer

Wage breakout looms (Japan edition). Shunto time in Japan, or the wpring (wage) offensive is suddenly relevant again, after years of being ignored by companies refusing to offer pay rises to their employees. Normally wage breakout headlines and warnings are the stuff of the overexcited writers and editors at the Financial Review and The Australian. But, later in Japan today, Toyota will reveal a major change in tactics — its biggest pay rise offer to employees for 13 years as Japan finally climbs on board the push by the Abe government and the Bank of Japan to inject more inflation and cost pressures into deflationary Japan. And the economy will need a jolting after the central bank (the Bank of Japan) revealed yesterday that, because of weak oil and gas prices “the year-on-year rate of increase in the CPI is likely to be about 0 per cent for the time being”.

The Bank of Japan said the economy was in a moderate growth phase, and said it would not change its current policy stance to react to the lower oil price. The wage rise from Toyota (3.2% on average starting April 1 for a unionised employee) will be the first of a slew of similar increases across corporate Japan, which will be revealed later today as well. Seeing inflation is effectively zero for the time being (after stripping out the lingering impact of the rise in sales tax last April 1 from 5% to 8%), the wage rise should have a big impact on disposable incomes and on government tax revenues. But will the wage rise be granted by medium and smaller companies, which traditionally are squeezed by their bigger customers when costs rise? — Glenn Dyer

Cancer treatment flops. More than $1 billion has been wiped off the market value of Sirtex Medical after the company said its much-anticipated clinical trial had failed to show that its liver cancer therapy was a significant improvement on standard chemotherapy. Shares in the medical device company slumped from their last close of $39 to as low as $14.80 in early trading on Tuesday, but had recovered to about $17.30 at 1.30am AEDT. The stock had soared 150% in the past year in anticipation of the clinical trial result. A number of analysts had stoked the market’s excitement with bold upgrades to their recommendations in recent weeks. Last month, both UBS analyst Andrew Goodsall and Wilson HTM analyst Shane Storey upgraded their investment recommendations to “buy” and slapped 12-month price targets of about $50 on the stock. The disappointing result will come as a blow to the local biotechnology industry, given Sirtex had climbed to be the sector’s next big hope. — Glenn Dyer

Oil gloom rises. While the US Federal Reserve’s post-meeting statement in the early hours of tomorrow morning, and the quarterly media conference for chair Janet Yellen, are holding the attention of markets, global oil prices have now fallen for six trading sessions in a row, with the US West Texas crude futures price in New York down 13% in that time. Some of that fall has been down to the surge in the value of the US dollar (which has tapered off for the time being ahead of the Fed meeting). But much of the fall is also down to the growing realisation that US production isn’t going to fall, despite the shutdown of many US-based oil rigs in the past few months.

And then there’s the stocks problem with oil traders almost on their knees praying for good news tonight and tomorrow on the level of US oil stocks. They rose 4.5 million barrels to 448.9 million barrels on the week ending March 6. That’s the highest they have been for this time of year in 80 years. TD Securities reckons US oil storage is now 86.2% full, especially at Cushing in Oklahoma, where oil bought and sold in the US futures market is deliverable. There are now fears that if more oil has to be delivered to Cushing, the place will run out of storage (it can’t be built quick enough), forcing oil to be dumped at knock-down prices. So, when the first drop in US weekly oil stocks happens (it’s reported by the independent Energy Information Agency), watch for an almighty relief rally in prices, and then a big fall back.

US traders report the number of short positions in the West Texas Intermediate (a grade of crude oil used as a pricing benchmark) contract has started rising again, meaning the bears are back prowling, looking to make gains from falling prices. And in a late report, US oil prices have fallen sharply in Asian trading this morning after the American Petroleum Institute (which keeps an industry eye on oil and product stocks), reported that US crude supplies jumped by a huge 10.5 million barrels for the week ending March 13, instead of an industry-based forecast of a 3.7 million barrel rise. Oil fell to US$42.70 in Asia, a new six-year low. — Glenn Dyer