Understand the fast-changing domestic and global economic forces under the tectonic plates driving our markets.
We were the first to publicly canvass the near-term possibility of Aussie QE (actually, it was one our investors who encouraged us to dig into this), and an increasingly intense debate on the subject has since been unleashed with CBA publishing no less than 3 reports on QE within about... Show More
On the 5th of May, the NY Times published this story; Professors in 179 Colleges and Other Leaders Assail Rise in Rates as Harmful to Country and Sure to Bring Reprisals. The article quotes from a letter signed by 1028 economists across America urging the President not to proceed with... Show More
The consensus outlook for the US economy has become increasingly fearful in recent months. In particular, the bears point to renewed trade war concerns, which have been damaging confidence. At the same time, signs of heightened recession risk are emerging. These include:Inversions in parts of the US yield curve,A warning... Show More
The goldilocks run Global Equities has enjoyed since the start of the calendar year finished during May, as renewed fears about global growth weighed on sentiment. For the month, Global Equities returned -4.3% (in AUD terms) including a 1.5% benefit from a weaker A$.Weighing on equities markets was the decision... Show More
Global trade data has been slowing rapidly over 2019, but last week’s US employment report was a dire warning, and can expedite the US Federal Reserve (the Fed) towards rate cuts later this year. US employment was weaker at a headline level, with revisions and average hourly earnings also slipping... Show More
Global equities rebounded strongly last week, reflecting ongoing hopes of a US interest rate cut and signs that US trade tensions with Mexico at least would soon be resolved. And sure enough, Trump suspended planned tariffs on Mexico overnight following an apparent agreement to tackle illegal immigration. Sadly, the situation... Show More
Earlier this year, IBM unveiled the first ever commercial quantum computer. In quantum processing, unlike the binary code programming of older computers, something can exist as a 0 or a 1 and everything in between, all at the same time. That’s akin to Schrödinger's cat, which in the famous thought... Show More
This week the Aussie weakened a little against most major currencies but has held up against the US dollar. This is a decent performance given that it had to absorb the RBA’s first rate cut since 2016 and Australia’s very poor GDP data. On Tuesday the RBA cut its cash... Show More
Today I explain why ANZ was nuts not to fully cut its lending rates in May; why it will be even harder for all banks to pass along the next RBA cut, which could come in July or August; why the cash-flow impact of rate cuts could actually be negative;... Show More
As expected the Reserve Bank of Australia (RBA) cut interest rates by 25 basis points on Tuesday, taking the cash rate to 1.25%. We take a look at the economic indicators in conjunction with Governor Lowe’s comments to help determine what the most likely action is for the RBA. Given... Show More
