On gold, the question we are not asking is whether the price will go up or down and concerns around the price being at an all time high. The question for us is more a portfolio construction and diversification one. Do we believe gold [as perceived by the market (remember: in our view history rhymes … Read more
The US bond market was awoken from its delirium last week by the surge in the core PPI data. The index showed a 0.9% increase in July made of: Services 1.1%. Goods 0.7%. This lifted the 12-month PPI to an increase of3.3% from its June 2.4% reading. The message was that, in aggregate, companies are … Read more
The markets have made a remarkable recovery from their “Liberation Day” induced sell-off in early April, with the S&P 500 Index up +28.3%, S&P/ASX 200 Index up +16.6% and MSCI All Country World Index (AUD) up +17.3% from their April lows (at the time of writing). If we look across the global equity complex, apart … Read more
Although the headlines will be all about the US jobs data it was probably a combination of factors that triggered the big fall in US yields on Friday night. In no particular order here is the Friday night list: Non-farm payrolls plus 74,000 jobs added in July. June payrolls were revised down from 147,000 to … Read more
The latest Australian inflation data is only likely to increase investors’ expectations for the Reserve Bank of Australia (RBA) to cut the RBA cash rate further in the current easing cycle. Australia’s consumer price index (CPI) for all groups increased +0.7% for the June 2025 quarter or +2.1% on an annualised basis. The more closely … Read more
The only real or hard bit of economic data last week was the US durable goods data. For economists, who understand economic theory, the durable goods data is a key forward indicator because the ex-defence durable goods data is a good proxy for business spending plans (Capex). Last month ex-defence durable goods declined 0.7% when … Read more
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