Insights

Globally, inflation, as measured by CPI, is rising quite broadly, across most developed and emerging economies, and at an accelerating rate. As a result, central banks are being scrutinised more intensely as the “transitory” narrative of 2021 has been discarded,...

In the month since we last detailed RBA cash rate expectations, a lot has happened where the market has raised rate hike expectations aggressively. Specifically, projecting a cash rate of 2.15% by year end, with over 2% of rate hikes...

Putting the topic of the Russia-Ukraine war aside for a day, higher and more sustained inflation is still front-and-centre for investment decision making this year, as well as the likely reaction function that central banks will have in dealing with...

It's that time of the year where we start to aggregate our views to provide tactical positioning for the 2022 calendar year. I've elected to start off our "Outlook" notes series by tackling what I find to be the hardest...

In the past month since we’ve spoken about the trajectory of our AUD and its valuation, quite a lot has changed where AUD/USD has found support and the fundamentals are improving. We nuance our views with the concept of “horizon...

This has been a fast moving week, between a live Fed policy meeting, the AUKUS agreement and nuclear submarines, the looming spectre of China Evergrande missing bond coupon payments, and RBA providing an explicit framework for how it can provide...

Historically, our AUD’s worth has been defined by three key criteria – commodity prices, interest rate differentials (“carry”) and China. In respect of the developments of 2020, we can now add COVID-19, creating the “four C’s” framework. In today’s note...

The RBA met for their monthly policy meeting yesterday and their statement surprised slightly dovish, having re-affirmed their decision to taper their asset purchase program, but doing so in a slowly manner than previously stated. Whilst this is dovish and...

In the weeks leading towards the annual Jackson Hole Symposium, we weren’t expecting anything profoundly shocking to eventuate, where the Fed – like other central banks – has been slowly providing forward guidance to avoid another calamitous “Taper Tantrum” that...

When we published our 2021 Outlook last year, we forecast an AUD/USD exchange rate to reach 80c, which happened in 35 days, in early February! Since then, AUD/USD had trended lower, as our AUD has been weak relative to the...

Yesterday the RBA met in a meeting foreshadowed in previous months to be “live”, where they would potentially recalibrate the monetary policy setting of the domestic economy. The RBA didn’t disappoint – amending their asset purchase program, adopting data-based forward...

In the past, the ability to buy and hold foreign currencies such as US dollars or Japanese yen was unavailable to non-institutional investors, where the minimum requirement was generally millions of AUD of investment, and a private banking arrangement. However,...

Usually when Australian exporters have big years – like they’re having this year – we see the AUD/USD exchange rate rally where AUD outperforms most other currencies. However, this year AUD/USD is trading in a confined range, while our terms...

Over time, there are three things which have held true – death, taxes and a change in the global reserve currency.  By nature, all predecessors to the USD’s rule as the global reserve currency have fallen – brought down by...

It has become an ever-increasing topic of discussion in how to avoid potential market drawdowns this year or next, yet still be invested. In fact, for many balanced and growth mandates, they are required to maintain allocations to equities in...

As primarily a fixed income investor, I spend an inordinate amount of time managing foreign currency fluctuations, as currency exchange rates tend to gyrate more than the underlying bond prices. As an example, it doesn’t make sense to buy a...

Over the last decade, our Australian dollar (AUD) exchange rate has been closely correlated to the relative change in iron ore prices. As iron ore was more highly demanded and bought, our AUD would rally against foreign currencies – all...

In Monday’s missive regarding the RBA’s (potential) impending rate cut and alteration of current monetary policy settings, the key sentence for me and a lot of other market participants was “Given the outlook for inflation and employment is not consistent...

Worried Australians have stockpiled fresh Australian banknotes during the current pandemic, with Note Printing Australia issuing over $10billion worth of new notes year to date, increasing the total supply of bank notes 13% from 84 to 95bln AUD. This is...

It’s been widely publicised that this crisis is different from the GFC, as its origin is medical in nature as opposed to financial. This has prompted us to assess financial markets differently, as the government and institutional responses have been...