Understanding the effect of US tariffs on the rest of the world is mostly about second and third order effects, and weighing up which effect is going to be the strongest.
Over the weekend of February 1-2, Australian time, US President Donald Trump fired the opening salvos in what might have become (and may yet become) a nasty trade war between supposed allies the US, Canada and Mexico.
The RBA will do something historically noteworthy this coming meeting, regardless of what they decide. Either they will deliver the first rate cut of the 2025 rate cutting cycle, or they will disappoint a market priced for cuts more severely than they ever have before. With the consumer side of the economy showing signs of strengthening following tax cuts and real wages rising, there are plenty of reasons to wait before delivering the rate cut, even if inflation has fallen materially. But the optics may not let the RBA wait. So does the RBA want a rate cut or a hard place?
The Q4 CPI data has printed and it was generally better (that is lower) than anticipated. The RBA has some big decisions to make at their coming meeting. The headline inflation rate was +0.2% on the quarter and +2.4% on the year.
As we move into the Q3 GDP release, the December budget update season, and from there into a new US Presidency, we thought it would be useful to think about how Government spending interacts with economic growth and with bond markets.
Donald Trump has won the US election. He will find the economy strong in some ways with unemployment low and inflation falling, but he will also face a large deficit that will – or perhaps should - curtail plans for large tax cuts or large spending initiatives.
The Labour Market is the second of the RBA’s two mandates and clearly important to the economic health of the country. In this piece we look at some of the developments in the labour market over the recent months and whether we’re arriving at a turning point.
How a bond’s return can be expected to evolve depends critically on the shape of the yield curve.
Having gone through the key characteristics of RMBS notes and some of the key technical terms, we are looking now at how these notes have generally performed over time.
For the first time in my career I can honestly say that there is a clear and compelling reason for the RBA to raise rates – which I’ll outline shortly – but also a clear and compelling reason for the RBA to lower rates too.