When it comes to Australia, our view within the equities team is one of cautious optimism. What many investors don’t know is that Australia’s economy is heavily reliant on China. In fact, we believe the country’s dependence on China as a trading partner and as a major influence on commodity... Show More
2018 has been, so far, a year of transformational markets driven by populism, politics and policy. Tectonic plates are shifting under the market, and investors are rightly nervous. Despite nearer term fluctuations, U.S. equity markets still remain close to record valuations while looking fatigued. Meanwhile, Quantitative Easing (QE) is being... Show More
Mortgage interest rates in Australia have increased in recent months, despite a steady cash rate. Domestic mortgage rates are heavily influenced by a combination of factors in addition to the official cash rate, and two we’re going to focus on in this paper are the banks’ exposure to domestic and... Show More
As an active manager of high-grade bonds, we continue to focus on the moves of the US Federal Reserve. The Fed remains resolute on its path of increasing short-term rates into the zenith of the US economic cycle, and as the world gorges contently on debt. Show More
Gold prices have steadied in the last few trading days, after correcting over the last month in the face of a rallying USD, and a sharp unwind in speculative positions. Show More
In any discussion of the Australian housing market, it’s impossible to avoid discussion of a catalyst. “We see no immediate catalysts for a crash,” has become the cry of the perpetual housing bull. But Dr Philipp Hofflin from the Lazard Australian Equity Team believes a catalyst is unnecessary. Show More
The Royal Commission into Banking. My lord! But rather than opine over the content, we are interested in the potential impact. Several months ago our economist Tim Toohey estimated the impact on consumer spending when interest only loans switched to principle and interest. We were pleased to see Deputy Governor... Show More
The 2018-19 Budget will be the last before the next election (due by May 2019) and so had to provide pre-election goodies but in a way that keeps the return to surplus on track. Thanks to an improvement in the budget position since the Mid-Year review, of around $7bn per... Show More
While the global economy delivers on growth, the signs are there from the US regarding the pressure of inflation as the Fed raises rates, coupled with indications of wage pickup across the world. The RBA remains in a holding pattern on rates, and won’t move until the unemployment rate drops... Show More
The consensus view is that it is unlikely that the Reserve Bank of Australia (“RBA”) will act to raise cash rates in 2018. While not all the pieces are in place yet to justify a rate rise, it may not take that much to get the RBA over the line. Show More
The US Federal Reserve raised interest rates by 0.25% as expected to the upper band target of 1.75%, 0.25% higher than that of the RBA cash rate. The Fed rationalised the increase noting the strengthening of the economic outlook in recent months. Show More
Rates are rising in the US, but it is less clear when Australia will follow suit. At our recent Investment Forum, we hosted six of Australia’s top investment strategists to discuss when the Reserve Bank of Australia (RBA) might hike, and to ask several other key questions, including where they... Show More
FIIG Securities guest contributor, Stephen Koukoulas says for more than two years, the annual underlying inflation rate has been between 1.6 and 1.9 per cent, locked below the RBA 2 to 3 per cent target. Here he talks about what this means, and takes a look at the data on... Show More
In my AFR column I explain why the RBA, not housing supply as governor Philip Lowe conveniently argues, was responsible for blowing the great Aussie housing bubble and what assets currently look cheap in a world where most remain dear (click on that link to read for free or AFR... Show More
Over the past 15 years Australian house prices have been on an incredible run, resulting in Australian households becoming some of the most indebted in the world. So what is the economic cost of Australia’s sky high property prices and what could it mean for property prices in 2018? Show More
Yet again another quarter and another CPI miss. The RBA has no reason to move rates on the back of these soft numbers. Despite oil prices rallying throughout the quarter and the global economy and risk in general being bid to the moon, we are still yet to see the... Show More
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
The recent house price data from Corelogic are showing further falls in house prices. The falls are, disconcertingly, most evident in Sydney where prices have dropped 0.5 per cent so far in January, which brings the aggregate fall since the September 2017 peak to a chunky 2.9 per cent. This... Show More
The Reserve Bank of Australia has left the cash rate on hold for a 16th straight month. What changed since the last meeting? Show More
The most important question for 2018 in an Australian context will be whether the economy is strong enough for the Reserve Bank of Australia (RBA) to start removing policy accommodation. That is to say, to have confidently begun a tightening cycle. This is the expectation of most market economists and... Show More
