The 90-day BBSW rate surged 19bps to 3.76% after the RBA decision to leave rates on hold at the July meeting and finished the week at 3.72%. Some market participants are still wanting to believe that a rate cut will occur in August, but we strongly believe that expiry of the large electricity subsidies (State … Read more
US Economic Outlook Last week’s non-farm payrolls number of 147,000 was far in excess of the market’s expectations of 110,000. Ordinarily we would not see this as significant for the bond market because a 125,000 monthly increase is required to keep the unemployment rate steady and so a reading in one month of either 147,000 … Read more
European equities are increasingly gaining favour among global investors at the expense of U.S. equities. Funds flow data and recent performance point to this fact. The question is whether this trend is sustainable? Europe’s STOXX 600 Index has experienced a sustained, long underperformance relative to U.S. equities (S&P 500 Index) since the global financial crisis. … Read more
The US strikes on Iran’s nuclear facilities on Sunday will no doubt impact markets on Monday, but it could have been worse. The US has targeted only the 3 main uranium enrichment facilities and perhaps forestalled Israel targeting Iran’s oil production and shipping infrastructure. Macro Commentary One of the less obvious byproducts of the Israel … Read more
Energy markets are receiving fair bit of airplay over the past few days as tensions in the Middle East have materially escalated and this morning one of Australia’s largest companies, Oil & Gas producer Santos Ltd (STO), has received an all-cash bid of $8.89 per share from Abu Dhabi National Oil Co (a state-owned company). Let’s … Read more
Last week’s US CPI was largely ignored by the markets – just as well. The data is currently distorted by the inventory tariff related build up and the ongoing tariff uncertainty. It is our view that, fundamentally, US markets and by association all global asset markets are rapidly approaching a day of reckoning. None of … Read more
There has been a lot of commentary from all sources about the correlation between the USD, equity and bond markets in April. Several Fed Governors, market strategists and large investors have all given their opinions on why this occurred. They are all desperately trying to make something simple complex. The USD, Equity Markets and Bond … Read more
It is worth remembering, that economic forecasts from the RBA and the major banks that inflation will keep falling, are from the same economists that did not predict that inflation would rise in 2022. Arculus was then one of the few lone voices in the forest pointing out from late 2020 that all the ingredients … Read more
The RBA delivered a widely expected 0.25% cut to the cash rate at its recent monetary policy meeting, taking the official RBA cash rate to 3.85%. The Board noted the following in a statement accompanying the decision: “The Board judged that the risks to inflation have become more balanced. Inflation is in the target band … Read more
