Federal Treasury, Head of Global Strategy TD London, Advisor to a PM, punter. Speaker. MD Market Economics.
Joined May 2009
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My 2026 forecasts:
GDP H1 lifts to 2.5%; sub 2.0% in H2
Unemployment rate to 5%
Inflation eases 2.0 to 2.25%
Wages growth soggy at 3%
RBA cuts to 3.10%
10 yr bonds 4.00%
AUD lifts to 75 c
House prices – no change, downside risks
ASX200 – below 8,000
youtube.com/watch?v=u6007K2J…
A Saturday Morning Omnibus.
Oil US$117 a barrel (Brent) - going from bad to worse to the dog house.
Stories that the RBA is frustrated at the persistence of inflation. No shit Sherlock.
Well, some of us are frustrated with the RBAs head in the sand ‘analysis'.
House prices keep falling.
Victoria state election betting.
A few tips for Flemington, Randwick and Morphettville.
youtube.com/watch?v=cttbd14_…
This is big news.
Thankfully Australia with a AAA rating reflects prudent economic management & is something to cherish
After markets close this weekend Moody's are likely to downgrade France's credit rating from AA3 to AA1. If France is downgraded by Moody’s, this would not affect the EU’s rating but would result in a downgrade of EFSF to Aa1. In addition, French agencies rated by Moody’s would also be downgraded in line with the sovereign. OATs dislocated further from EGB peers overnight; 10y France v Germany +14bp to 174bp, 10y France v Italy +5bp to 47bp. The French 10y yield rose 6bps to 5.07%. OAT futs are down in APAC trading. base:0x832bcced5bd431b31663576490344ea1c0bea295 #France
Australia's govt debt non-crisis. A fuss about peanuts.
Gross govt debt was steady this week at $994.9 billion.
It has been at or around this level for the best part of a year with the trivial budget deficit keeping debt levels on a very gradual glide path higher.
Next week, the govt will borrow just $4.0 billion of bonds & T-Notes – there are no maturities which means next Friday gross debt will be $998.9 billion.
There is lots to cheer in these numbers & nothing to be frightened of.
Boo!
youtube.com/watch?v=T3lDCi_d…
That is very bad news.
The ABC has such a low priority on economics & markets that a small team is left to carry the can on the most important issue for society - the economy.
Shows like Insiders rarely mention economic issues, let alone debate them. So too podcasts like Politics Now where we know more about the presenters children's thoughts on politics than analysis of what is happening in the economy.
The ABC funds juvenile shows like Planet America as part of its saturation coverage of things in the US.
Listen to the ABC news - more likely to cover a storm in US mid-west than details of the Australian labour market. Or a random shooter in some wretched town down south. Of course it covers every brain-fart of Trump, but stuff-all on unfolding economic issues in Australia.
Bad move ABC, but go well David!
The proverbial Barry Crocker.
Not a huge fan of these indices, but in concert with the other wheels that are falling off the economy, it would be a mistake to ignore what is being signalled
ICYMI
RBA is downplaying the fall in house prices & rise in unemployment rate at their peril
The RBA is playing a dangerous game.
RBA Deputy Andrew Hauser downplayed the effect of rising unemployment & falling house prices when outlining the issues dominating RBA thinking as it prepares for the interest rate announcement on 3 Nov.
While Dr Hauser was at pains to say inflation was ‘materially worse’ than forecast in August, he gave short shrift to the ‘materially worse’ unemployment rate. He also glossed over falling house prices even though around $1 trillion of household wealth has been destroyed since March, something that presents material downside to household spending growth.
youtube.com/watch?v=qqN2KSt4…
Oh - it's not just Australia that these global oil prices are impacting.
Contrary to the muppetry that goes on here
The shock of oil prices at a five-month high of $110 a barrel and gas prices in Asia and Europe hitting their highest levels since December 2022 is making its mark on household budgets.
As well as raising the costs of transport and heating, it adds to pressure on food, clothing and packaging prices and contributes to elevated levels of inflation and borrowing costs reut.rs/4dQSeUW
As a parallel aside to the RBA's view that a major tranmission mechanism of monetary policy is via the exhange rate, it is noteworthy that the 10 year bond yield in France is 5.00% vs 3.43% in Germany (just for an example) yet both have the same currency
ICYMI
What drives currencies? The RBA goes hard on interest rates and monetary policy.
RBA Deputy Governor Andrew Hauser went hard saying that the cash flow impact of debtors (mortgage holders) was the least important transmission mechanism in the link between monetary policy & inflation.
Instead, Dr Hauser said the impact on foreign exchange rates was the dominant factor bringing inflation back to target when monetary policy was adjusted.
Click on the link to see why this is a risky game to play.
youtube.com/watch?v=7mI9MT-M…
Victoria State election betting update:
More flows to the Coalition in last 24 hours.
Coalition $1.32
Labor $5.50
Other $9.20
Via @Betfair_Aus
Bet only what you can afford to lose
The RBA is playing a dangerous game.
RBA Deputy Andrew Hauser downplayed the effect of rising unemployment & falling house prices when outlining the issues dominating RBA thinking as it prepares for the interest rate announcement on 3 Nov.
While Dr Hauser was at pains to say inflation was ‘materially worse’ than forecast in August, he gave short shrift to the ‘materially worse’ unemployment rate. He also glossed over falling house prices even though around $1 trillion of household wealth has been destroyed since March, something that presents material downside to household spending growth.
youtube.com/watch?v=qqN2KSt4…
Could it be that Australia's inflation issue is part of a global phenomenon? Obviously yes.
All other central banks don't have the hang-up of the RBA about much of it because it is a temporary supply side issue that monetary policy cannot fix.
UK inflation jumped to 3.5% in September (up from 3.1% in August), topping the consensus forecast and hitting its highest level this year.
The release reinforces the broader global theme: inflation re-accelerated in September, due mainly -- but not exclusively -- to higher energy prices.
#economy #markets #inflation #uk
ICYMI
The RBA reckons that the biggest impact on inflation from monetary policy is via the exchange rate.
This might look good in a text book but in reality it's unhelpful to think this way & can lead to policy errors
What drives currencies? The RBA goes hard on interest rates and monetary policy.
RBA Deputy Governor Andrew Hauser went hard saying that the cash flow impact of debtors (mortgage holders) was the least important transmission mechanism in the link between monetary policy & inflation.
Instead, Dr Hauser said the impact on foreign exchange rates was the dominant factor bringing inflation back to target when monetary policy was adjusted.
Click on the link to see why this is a risky game to play.
youtube.com/watch?v=7mI9MT-M…
Big news - looks like immigration is falling sharpy, possibly/probably below the govt's target.
That will spark some debate if we find NOM is under 1%pa in the next few qtrs
What drives currencies? The RBA goes hard on interest rates and monetary policy.
RBA Deputy Governor Andrew Hauser went hard saying that the cash flow impact of debtors (mortgage holders) was the least important transmission mechanism in the link between monetary policy & inflation.
Instead, Dr Hauser said the impact on foreign exchange rates was the dominant factor bringing inflation back to target when monetary policy was adjusted.
Click on the link to see why this is a risky game to play.
youtube.com/watch?v=7mI9MT-M…
Victoria State election betting:
Flows to the Coalition in the past week or so.
Coalition $1.37
Labor $5.10
Other $9.20
Via @Betfair_Aus
Note: Bet only what you can afford to lose.
