On the 9th March 1987 U2 released the Joshua Tree, the fastest selling British Album of all time that went on to sell over 25 million copies. Joshua Tree is still acclaimed as one of the greatest albums of all time. Interestingly Bono considered pulling the album prior to its... Show More
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
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
The latest FOMC meeting included the release of plans for balance sheet normalisation or a transition from QE to QT . Show More
As the Fed meets to make its June monetary policy decisions, the consensus (and my view) is that they will hike interest rates again. This will add to the interest rate differential support for the US dollar and driver further policy divergence. This comes at a time where the US... Show More
We are used to the experience of economic developments influencing and sometimes determining political events. This past year we have seen political events influencing markets and economic forecasts more than usual. The rise of the populists as a reaction to the specific disaffection with wage stagnation, immigration and terrorism is... Show More
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
Market moved up again on global positive sentiment ahead of the US Fed update to be only 40 points off the 2016 high…but on accumulation (i.e. dividends included) basis we are at all-time highs (i.e. created a new high today). The positive performers today were led by Discretionary retail and... Show More
Good morning everybody, on what is likely to be a tough day for local stocks with the futures pointing to at least a 1.5% fall in early trading. Today, we have changed our usual question style report due to the large nature of emails received over the weekend on the... Show More
Volatility returned to global markets late last week after the European Central Bank President Mario Draghi left interest rates unchanged and downplayed the need to commit additional stimulus. The news surprised markets that had been expecting an extension of the ECB's asset purchase program. Mr. Draghi's only new announcement after... Show More
Since the surprise FOMC rate hike in 1994, the FOMC has never raised rates, or cut them, without the ‘pre-approval’ of the Fed Funds Futures (FFF) market. If history holds, the FFF would need to price more than 60% probability before the FOMC would act. Yellen and Stanley Fisher are... Show More
Aussie market pulled out another positive day despite overall negative sentiment in Asian markets after US Fed inaction and before BOJ stimulus rain. That’s 23 positive days out of 30 trading days since mid-June. Markets are way too calm and volatility indices keep falling….bond yields fall down to 1.87%. US... Show More
Aussie market was volatile and delivered a tiny positive with stronger commodities and rate cut supportive CPI. That’s 22 positive days out of 29 trading days since mid-June. As we have been saying for the past week, the CPI data was not going to make much of a difference to... Show More
A week on from the Brexit decision, the outlook remains decidedly uncertain. Equity markets have rallied back, as has the AUD. But sterling remains near its lows amid expectations of further easing. It will be September/October before new leadership takes over in the UK and the formal exit process can... Show More
This week has been all about confidence; jobs; and, in the US, the FOMC. Next week we turn to the UK for the Brexit vote. &feature=youtu.be Show More
In this week's edition, Chief Economist Bill Evans assesses the implications of the Q1 GDP report for the June RBA meeting and beyond. The RBNZ also meets this week; a summary of our NZ team's expectations are also included herein. https://wibiq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2016/June/WestpacWeekly20160606.pdf Show More
A quick summary of the key themes apparent in this week's Australian Q1 GDP report. Plus looking ahead to the RBA and Chair Yellen next week. Show More
In a speech on Friday at Harvard University, US Fed Reserve Chair, Janet Yellen, made some important remarks about the timing of the next rate hike. “It’s appropriate for the Fed to gradually and cautiously increase our overnight interest rate over time… Probably in the coming months, such a move... Show More
Minutes from the RBA and FOMC will provide further clarity on the outlook for policy this week. We also await an update on the Australian labour market: wages on Wednesday; then jobs and unemployment on Thursday. https://wibiq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2016/May/wkly20120516.pdf Show More
In this week's edition, we assess the key considerations for the RBA in coming months and investigate the impact that the May rate cut and 2016 Federal Budget have had on consumer sentiment. &list=PL29442364793B8CE9 Show More