Who said “Let them eat cake”? Most will answer Marie Antoinette. The Storming of the Bastille on the 14th July, 1789 marked the beginning of a French Revolution that was to last 10 years, overthrow the monarchy and replace it with a Republic, only to then see a military coup... Show More
After a favorable “risk on” year that brought numerous new highs to many stock market indices worldwide without significant drawdowns, investors have perhaps become lulled into a state of complacency and security around their investment portfolio allocations. Show More
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to a close, central bankers face a conundrum: Nearly a decade of money printing has suppressed volatility… So, as QE is withdrawn, is volatility inevitable?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
When we look back upon the financial excess prior to the GFC, the great bust and near financial Armageddon, the multiple bouts of global quantitative easing transferring private debt to governments thereafter, it will make a historic story for the grandchildren. Boom to bust to boom again within a decade,... Show More
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
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
Following the Macron victory, Sunny Bangia, Deputy PM at Antipodes Partners, has provided this analysis for the road ahead for the EU. With the election of Emmanuel Macron to France’s highest office, the European Union (EU) now stands at a crossroads. As a monetary union with structurally different economies, the... Show More
China’s central bank balance sheet is the biggest central bank balance sheet in the global economy, and has been for several years. That reflects China’s two bouts of QE over the past 10 years. Initially China carried out a type of QE we label ‘FX QE’, i.e. from 2009 through... Show More
“Toto, I’ve a feeling we’re not in Kansas anymore” … As we look around the fixed income landscape today, we can get some idea of how Dorothy felt. In the JP Morgan Government Bond Index, which encompasses the 13 largest government bond markets, an extraordinary 30% of sovereign debt, or... Show More
The Bank of Japan (BoJ) was effectively the first central bank to introduce ‘unconventional’ monetary policy way back in 2001. Years later, the US Federal Reserve (Fed) borrowed from the BoJ’s playbook in the aftermath of the financial crisis in 2008 in an effort to guide the US economy out... Show More
In the AFR I ask: is there a 1 per cent "lower-bound" on the Reserve Bank of Australia's cash rate that means we may have only two cuts to go before it resorts to "quantitative easing"; were those greedy banks justified in retaining half the RBA's latest easing on the... Show More
Australia’s interest rates are at record lows to increase economic activity and produce a lower currency to stimulate exports as the resources boom peters out. The housing market has picked up the slack, but our consumer debt levels are now the highest in the world. Show More
The recently released Economic outlook from the Carlyle Group, titled “The search for yield and business investment”, focused on why corporate investment has been so weak in the past few years, despite record low interest rates. With income streams from “safe” investments (cash and government bonds) at record lows, it... Show More
Gold has continued its impressive gains this week, with the price of the precious metal blowing through USD $1200 and AUD $1700 per ounce this week, within touching distance of its all time high in the local currency. Share-market volatility is obviously a driver, but does it really justify a... Show More
Seven years after the global financial crisis erupted in 2008, the world economy continued to stumble in 2015. According to the United Nations’ report World Economic Situation and Prospects 2016, the average growth rate in developed economies has declined by more than 54% since the crisis. An estimated 44 million... Show More
We resume macro updates on a cautious tone, with Longview Economics (with whom we consult and who also contribute here on Livewire) providing several updates over the last few months, which signal an increased risk of recession in the US, and inline with this view, a shift in tactical asset... Show More
This week the Bank of Japan decided to continue with its QE program. “Governor Haruhiko Kuroda and his colleagues continue to put on a brave face and act as if everything is going according to plan; but it’s not”, says Max McKegg, MD of Technical Research. The BOJ’s outlook showed... Show More
The ECB is poised to step in and buy rotten Greek debt off the financial system to stop contagion. We believe that the fairly stable response from markets on Monday (Europe) and Tuesday (Australia) indicate that markets have been too pessimistic regarding Greece. The ECB will unleash the full force... Show More
Mark Gilbert at Bloomberg says “with the Federal Reserve poised to unleash its first interest rate increase in almost a decade there's a debate among investors about whether the past is any guide to how markets will react to a monetary tightening.” In this article http://www.bloombergview.com/articles/2015-06-15/the-fed-won-t-ruin-bond-markets Gilbert sheds some light... Show More
The former head of the US Federal Reserve was in Sydney for the World Business Forum. Bernanke is well-known as the man who led the US Central Bank through the dark days of the global financial crisis; but he also implemented the controversial decision to stimulate the US economy via... Show More