Is A Yield Crunch Coming? Buy Transurban & Select REITS
I strongly believe there is a massive yield crunch coming in Australia. We saw it post GFC in the US, and in the local slowdown this cycle it will surface here too.
Read MoreInterest Rates
Stronger Jobs Data To Keep The RBA At Bay
The threat of an interest cut from the Reserve Bank has been held at bay for a few more months after a better than expected jobs performance in January that belied the wider gloom about the economy and key sectors such as retailing.
Read MoreFive Charts & A Table That Are Critical To Watch
Five key global charts to watch as to whether this will be the case are: global business conditions PMIs; global inflation; the US yield curve; the US dollar; and global trade growth.
Read MoreChinese Inflation Evaporates In January
More evidence that the pace of economic activity in China – especially in manufacturing – is weakening.
Read MoreRBNZ Adopts Similar Stance To The RBA On Rates
The Reserve Bank of NZ has left its key Official Cash Rate (OCR) steady at 1.75% and says it expects to maintain this level for at least the next two years.
Read MoreNAB Economists Shift View On Rates
Despite a small improvement in business conditions in January after December’s sharp fall and a small improvement in business confidence, the National Australia Bank has had significant change of heart and is now forecasting that the Reserve Bank will leave rates on hold for a long time – well into next decade – but with a rate cut not out of the question.
Read MoreTrade Data Detail Supports RBA’s Case For Optimism
The seasonally adjusted trade surplus for December of more than $3.6 billion was the second largest ever and moreover, Australia notched up a trade surplus in every month of 2018 – the first time every that has been achieved.
Read MoreRBA Walks Back Growth Outlook, Rate Cut Now 50/50
The Reserve Bank of Australia has revealed it has made a major change in its monetary policy stance, with a cut in the cash rate now even money bet.
Read MoreRBA Holds Steady Despite Slowdown Risks
Rates have now been on hold at the record low for 30 months straight, but financial markets are starting predicting the next rate move is more likely to be a cut than a hike as declining house prices impact on household spending.
Read MoreHousing, Jobs Data Soft Ahead Of RBA Meeting
The Reserve Bank board will find one or two points of interest from yesterday’s data releases at its first meeting today, but it won’t change the policy stance of no move in rates for the time being.
Read More‘Patient’ Fed Leaves US Rates On Hold
The chances for more rate rises in the US this year have been reduced dramatically after a change of heart by the US Federal Reserve.
Read MoreAustralian Housing Q&A With Shane Oliver
A Q&A on the Australian housing downturn: what’s driving home prices down; how far will they fall; what’s the impact on the economy.
Read MoreThe Fed And Market Turmoil
A more cautious Fed should provide some support for markets although more falls are possible into early next year before markets bottom and head higher as investors realise the US/global economy is not going into recession soon.
Read MoreWall St Reverses After Fed Raises Rates
The US Federal Reserve has defied President Donald Trump and lifted its key interest rate for a 4th time this year – but suggested strongly that it might cut the number of increases next year to just two.
Read MoreBig GDP Miss Fuels Rate Cut Speculation
Australia’s September quarter GDP has disappointed expectations by a long way, slowing sharply to just 0.3% from the June quarter (when it grew 0.9%), and well below expectations for a 0.6% rise.
Read MoreRBA Ends 2018 Where It Began
The Reserve Bank of Australia has once again kept its key interest rate unchanged at the record low of 1.5%.
Read MoreDebt, Wages, Trade On Annual RBA Worry List
The list of issues concerning the country’s top economic policymakers narrowed in 2017-18 to just three, two of which are hangovers from preceding years, according to comments by RBA Governor, Phillip Lowe.
Read MoreJames Grant
James Grant, editor of the 35-year-old Grant’s Interest Rate Observer, has been in Sydney this week and on Thursday he put on a lunch for his Australian subscribers, of which I have been one for a long time.
Read MoreYield and Risk
The XFJ accumulation index, which includes ASX 200 banks and REITs, along with their dividends, and which might be described as Australia’s retail bond market, underperformed the broader market last year – 5% vs 12% for ASX 200 Accumulation – and has the sector started the new year in the same vein: -1% vs flat.
Read MoreThe Lowe-Down
Look, what can I say? It is an irresistible temptation following Philip Lowe’s rise to the top of the Reserve Bank to pun on his name. Sorry, but I can’t promise to stop it.
Read MoreNeutral Madness
There was a bout of pure silliness this week after the Reserve Bank put out the minutes of its June board, including discussion of the “neutral cash rate” – that is, the goldilocks rate, at which inflation and unemployment are both low and stable.
Read MoreYellen vs. Trump
The reason the rate hike announced by the Federal Reserve this week became so certain, so early, is that after it raised rates in December, financial conditions actually became looser, not tighter.
Read MoreKohler’s Charts – RBA On Hold
The RBA meets for the first time for two months on 7 February. Monetary policy and whether or not the Reserve Bank of Australia will be adjusting interest rates any time soon will return to centre stage. At the moment, the futures market is giving a tiny chance of an interest rate cut in the next few months and beyond that is in fact pricing in the prospect for interest rate hikes from the middle of 2018.
Read MoreKohler’s Charts – Key RBA Forecasts
The RBA put out its six-monthly Statement on Monetary Policy today. Basically it’s saying that economic growth might go up (to 3.5%), or it might go down (to 2.5%), and inflation might stay the same, at 1.5%, or it might go up to 2.5%. In other words, our economic leaders at the central bank haven’t really got a clue; things could go either way from here. Nothing wrong with that, and in fact it’s always the case. When it comes to economic forecasts, the only people telling the truth are those who say they don’t know.
Read MoreKohler’s Charts – Cup Day RBA
This week is RBA meeting week, and the presentation of staff will be a classic economists’ “on the one and on the other hand”.
Read MoreQE In Europe & Reporting Season Wrap
European QE is finally here – better late than never. Importantly, Mario Draghi has left the door open to “do whatever it takes” as far as quantum goes. Euro currency debasement will likely be a feature for several years to restore competitiveness.
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