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Will Powell come to the party

Posted on June 5th, 2019

  With a small break in the onslaught of bad news on trade barriers and talk of anti-trust investigations, US equities rebound from their recent sharp falls.  US yields are also off the deck, but the market is sending out invitations for a rate cut party, and waiting for the Fed to turn-up.  Fed Chair […]

Safe haven status of the USD starting to crumble under the weight of Trump’s trade wars

Posted on June 1st, 2019

  US equities couldn’t muster an end of month consolidation.  They attempted to stabilise on Thursday but closed near their lows on Friday. The weight of the news was too much – Trump expanding tariffs threats to one of its biggest and most integrated trading partners, Mexico, and trade relations hardened between China and the […]

Bond markets displaying fear, equities clinging to the notion of a Fed or Trump put

Posted on May 29th, 2019

  The US equity market slid into the close on Tuesday to sit on key supports.  The market is beginning to acknowledge that trade policy actions to date are significant impediments to US, China and global growth and earnings. The bond market has proven more responsive to risks to growth so far this year.  Bond […]

Global risks escalate

Posted on May 18th, 2019

  The trade dispute has escalated in the last two weeks and looks set to be a war of attrition.  This is not good for the Chinese economy, or the US economy.  It is not good for global growth and will detract from the performance of more trade-dependent economies. The trade dispute initially led to […]

A tortured RBA Statement – they make the case to ease policy, but held steady for no apparent reason

Posted on May 7th, 2019

  This is one of the more tortured RBA policy statements for some time.   They have basically made a case to cut rates, suggested that their forecasts imply that they need to, but then have held off, hoping they are wrong and unemployment falls faster than they currently expect. For what purpose are they holding […]

Low inflation may force the RBA’s hand in May

Posted on April 24th, 2019

  The downside miss on inflation in Australia probably forces the RBA’s hand to cut rates.  The RBA generally doesn’t fuss too much with appearances once it changes its mind, so a cut at its next policy meeting as soon as 7 May is likely, even though it would come only weeks before the Federal […]

Dollar tests highs as global risk aversion remains elevated

Posted on April 24th, 2019

  The USD is testing the top of its range for over a year against the DXY major currency index, and its highs for the year-to-date against the broader Bloomberg dollar index against ten leading currencies.  The rebound in the USD is surprising in light of the stronger than expected Chinese economic data.  However, other […]

RBA’s Debelle strikes optimistic tone; remains lazer focused on the state of the labour market

Posted on April 10th, 2019

  We had warned to watch out for dovish noises from the RBA this week after it changed its monetary policy meeting statement earlier in the month to say they are monitoring developments, suggesting they may be willing to consider a rate cut in coming months if downside risks to growth materialize. Watch out for […]

May opens a path to unlock the Brexit Jam

Posted on April 3rd, 2019

  PM May calls for a unified government approach to unlock the Brexit jam.   Failing a unified plan, she has offered parliament a meaningful vote on a number of plans in a series of votes ahead of the EU summit on 10 April next week.   This appears to offer a way to find […]

RBA hints at an easing bias

Posted on April 2nd, 2019

The final ‘policy guidance’ paragraph added that the RBA is now “monitoring developments” suggesting that it is less sure that its current policy setting will remain appropriate. It said, “Taking account of the available information, the Board judged that it was appropriate to hold the stance of policy unchanged at this meeting. The Board will […]