Arculus Funds Management 
It was a nasty week for the bond market, with a significant rise in bond yields without this move being triggered by the release of any significant economic data, or at least the economic data that the bond market has in recent memory considered important. Paradoxically, the Australian bond market received very bad news in … Read more
You must admire the skill with which Wall Street and the bond market twist a narrative on adverse economic data to spin anything as good news. Seemingly, everything guides the Federal Reserve to cutting rates. Friday night’s nonfarm payrolls once again confirmed that the US economy remains robust and in no need of stimulus at … Read more
Last week’s monthly CPI data confirmed what we have been saying for some time and that is that the inflation dragon is a long way from dead in Australia and/or the inflation genie is still out of the bottle and about to destroy the village. This forced the last of the major banks ANZ, Westpac, … Read more
The IMF has stated on many occasions over the past three years that highly indebted countries are at risk of a prolonged period of economic stagnation or a depression, but has never actually named the US, Japan, or France. This is not to say that these countries are not as vulnerable as Spain, Italy, or … Read more
The audacity of Governor Powell, who has now cut rates by 50 basis points just prior to the election and 25 basis points as promised just after the election, was laid bare (naked really) last week when he said that the Fed is in no rush to cut rates. “The economy is not sending any … Read more
Last week the US electorate decided between the Republican America first policies as represented by Trump during the campaign and continuation of Bidenomics under Harris. It is worth noting that Bidenomics was still the Obama economic approach which was based on rewiring the US economy so that it had a much larger government sector and … Read more
Firstly, apologies for not including the risks of a UK budget related bond market meltdown in our list of geopolitical risks a few weeks ago. This risk is now a clear and present danger for the bond markets. The UK budget announced last Wednesday represents a seminal shift in the way a Western democratic … Read more
In the absence of any significant economic data the market last week was consumed by Trump economic policy conspiracies. This led the equity market to fresh highs and to a significant surge in bond yields. It is hard to fathom the markets economic logic with its Trump economic policy assumptions. He won’t get anything done … Read more
Last week’s Australian Labour force data was much stronger than expected but that did not stop some bank economists trying to downplay it by pointing out that a great deal of the employment increase came from government related services (Education, Health and Administration). We view these jobs as a lot more permanent than private sector … Read more
The following Chanticleer article in last weeks AFR was typically light on detail (Why Ray Dalio and Jamie Demon are looking past interest rate cuts to the ‘ticking time bomb’ of debt, inflation and geopolitics (afr.com)), but if we accept the headlines are true (just for a moment), these are: US Economy is in relatively … Read more
