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Chart Of The Week: Stay or Go? US Wage Growth is on the Rise...

Callum Thomas

This week it's wage inflation, but with a particular twist. Utilizing the great indicators from the innovative economics team at the Atlanta Fed, I have built a new indicator which I call the "Stay or Go Indicator". It is the difference between the annual wage growth figures for 'Job Switchers'... Show More

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The ten things to watch in 2018

Saul Eslake

Here are ten things that I think will shape the global and Australian economies in 2018, and that expect I’ll be talking about at conferences and events over the course of the coming year. Show More

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US bond yields heading higher in 2018

Elizabeth Moran

In this second of a three-part series from guest contributor, ex ANZ Chief Economist, Warren Hogan, this note assesses the outlook for US bond yields and explains why the US 10 year Treasury yield could be heading for 3.50%. Show More

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Dollar and Stock Market Rally Hits Gold!

Jordan Eliseo

Precious metals prices have endured a difficult few weeks, after failing to push through USD $1350oz in early September. Continued strength in US equity markets, greater pricing in of an expected rate hike from the Fed, and a rally in the USD have all contributed to the weakness, as has... Show More

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A quick-take on Passive QT

Callum Thomas

As expected (by me and pretty much everyone else) the Fed held interest rates unchanged and announced that it would commence its balance sheet normalization plan in October. The balance sheet normalization plan involves gradually ceasing reinvestment of principal from maturing bonds, and will result in a passive/automatic run-down... Show More

Yellen takes aim

Sam Ferraro

A number of popular scapegoats emerged in the aftermath of the financial crisis: conflicted credit rating agencies, a corporate culture and regulatory environment that encouraged risk taking over risk management, lax lending standards, rapid growth in credit, and what some considered to be excessively loose monetary policy from the U.S.... Show More

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6 catalysts for volatility, and how to play it

Fred Woollard

Implied volatility is now trading at record lows across a variety of asset classes, especially in US equities. This means that option markets are priced in the belief that the economic and political outlook in America and the world is as stable as it has been for more than 25... Show More

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Brace yourself for choppy markets

Livewire Exclusive

As the era of QE draws to a close, central bankers face a conundrum: Nearly a decade of money printing has suppressed volatility… So, as QE is withdrawn, is volatility inevitable? Vimal Gor, Head of Income and Fixed Interest at BT, argues that the market has a bumpy ride ahead. Show More

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Central banks rising as one? Not quite...

Alex Joiner

The Fed is clearly well out in front in reducing monetary policy stimulus. Its stance was demonstrated again in June as the FOMC (Federal Open Market Committee) increased the Federal Funds Rate by 25bp. As a result, the target rate rose to 1.00- 1.25%, while the Committee noted that the... Show More

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A change in the trend?

Vimal Gor

Just as the markets had convinced themselves they were in for an uneventful carryharvesting summer, something started to change at the end of the month, with central bank communication seemingly dominating economic data with respect to their impact on market moves. Whilst the theme of disinflation continued to play out... Show More

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From QE to QT - What will happen to bond yields?

Callum Thomas

The latest FOMC meeting included the release of plans for balance sheet normalisation or a transition from QE to QT . Show More

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The end of QE: What it means for markets and investors

David Sokulsky

In the aftermath of the Global Financial Crisis (GFC), the traditional method of lowering interest rates failed to promote meaningful growth or inflation. This prompted several major central banks, including the US Federal Reserve (Fed), to undertake ‘extraordinary’ monetary policy measures to stimulate their economies. The effect of such an... Show More

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2 factors weighing on the Australian dollar

Alex Joiner

US ten-year bond yields have fallen approximately 25bp since March and are at around 2.1%. Australian government bond yields have likewise fallen by around 60bp to 2.4%, after briefly looking to breach 3% back in February. However, what is more notable is the narrowing of the spread between the two,... Show More

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How long can the Kiwi keep flying?

Callum Thomas

The New Zealand dollar seems to be defying gravity of late, as the interest rate differential between the RBNZ's OCR and the Fed funds rate continues to move lower. While the interest rate differential sometimes works with a lead and sometimes with a lag in setting direction for the Kiwi... Show More

Fed heading for 3% by end of this cycle

Morgans Financial Limited

At a speech to the Executive Club in Chicago on 3 March, Janet Yellen laid out the Fed's intentions for the Fed Funds rate as plainly as possible. To begin, Yellen advanced the idea of the "neutral rate". She said the neutral real Fed Funds rate is neither expansionary nor... Show More

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Fed rate hike: What does it mean?

Craig James

The US Federal Reserve has lifted the target federal funds range by 25 basis points to 0.75-1.00% as expected. Two more rate hikes are anticipated in 2017 and three in 2018. The US rates decision affects global interest rates, currencies and sharemarkets. So, what happened and what does it mean? Show More

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Rise up! How high could US bond yields rise?

David Bassanese

Global bond yields have started to lift over the past year after several years of trending down. This post examines how structural and cyclical factors have affected US bond yields over recent years and what a “normal” level of US bond yields might look like going forward. Show More

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Westpac weekly AUD video

Sean Callow

The Australian dollar was hit hard this week by the market's scramble to price in a Federal Reserve rate rise this month, which boosted the US dollar across the board but last night hit the Aussie harder than most. I note the key comments from the Fed and look at... Show More

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Interest rates are too low

Christopher Joye

In The AFR I submit that both Australian and US interest rates are far too low---as manifest in soaring core inflation in the US (printing well above the Fed's target at 2.3% year-on-year in January) and even stronger house price growth locally---and complement the likes of CBA, BankWest and AMP... Show More

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The Fed - It's Rate Hike Time!

Callum Thomas

It's that time again... Almost a year after the last rate hike the US Federal Reserve is set to hike the fed funds target rate by 0.25% to a new range of 0.50-0.75%. The outcome of the FOMC meeting will be announced (along with the "dot charts" and economic projections)... Show More