Economics

Leading global macro and geopolitical research house BCA has delivered another consensus challenging research piece this week. Writing in a paper titled ‘Solved: The Mystery of the Oil Price and Inflation Expectations’ challenges the current nature and ballooning expectations of inflation. Drawing on the work of Nobel prize winner Daniel Kahneman, the paper highlights the…

Despite the media hype surrounding last week’s US rate hike, interest rates are going up but not as fast or as damaging as everyone thinks. The RBA upped rates for the first time in over 11 years by 25bps to 0.35 percent from 0.10 percent. Roughly a $65 a month increase, on a twenty-five year…

“Whatever you are thinking might be the trigger of a potential correction today, you are quite likely to be wrong” explains Michael Hampden-Turner, Director of Fixed Income at FTSE Russell in a recent blog post discussing the recession predicting capabilities of the yield curve. Headlines have been dominated by the undeniable fact and historic analysis…

White noise is broadly defined as the combination of sounds of all different frequencies together, typically being used to mask other sounds. Among the most common uses of white noise is to help babies (and adults) sleep without background noise. Whilst highly powerful for this purpose, one could easily make the opposite conclusion when it…

In the wake of Covid lockdowns in Shanghai, investors are being warned to remain alert to shifts in China’s zero covid policy. According to Datt Capital founder and chief investment officer, Emanuel Datt, “China is the engine room of the global economy, and any further extension of lockdowns geographically will weigh heavily on the global…

Only those who completely avoid any sort of media, social or traditional, would not be aware that the Reserve Bank of Australia (RBA) this week hiked rates for the first time in more than a decade. Tuesday’s decision, which moved the cash rate from 0.1 to 0.35 per cent, has reverberated through the markets, however,…

The March quarter is well and truly over. Unfortunately, the war in Ukraine is not. Chart 1: World equity market returns – March Quarter 2022 Looking at the world chart above, equity markets tumbled across the board in the quarter, except for some small pockets in Singapore and Australia. According to Ausbil, much of it…

From the outset, it is important to highlight that I do not disagree that interest rates should be higher than the current ’emergency’ settings by the Reserve Bank of Australia (RBA). Rather, in my view, much of the data suggests that interest rate hikes will do little to solve the inflation challenge facing not just…

Treasury Josh Frydenberg delivered his long-awaited, pre-election budget this week, seeking to offer respite to a ‘surge’ in the cost of living. The Federal Government, and next Government for that matter, face a difficult challenge in navigating what is likely a short-term surge in inflation and hit to the cost of living, with demands for…

The deepening war crisis in Ukraine is showing no sign of abating any time soon, with inflation hitting historical highs as war effects compound inflation triggered by the Covid-19 pandemic. BlackRock has released a research note covering its macro and geo-political view. The global asset manager says, “The war in Ukraine has already caused a…

The pandemic combined with the invasion of Ukraine has sent global commodity markets into flux. Commodities ranging from grain to crude oil are surging to near-record levels with 2020’s demand weakness offset by 2022’s significant supply-chain issues. In an environment of growing volatility and inflation, investors are naturally seeking hedges for their portfolios with gold…

Low-cost or ‘passive’ investing has been touted as the biggest innovation in finance for the last several decades. The idea is simple, mastered by the likes of BlackRock and Vanguard, which is to replicate a major index, like the S&P500 or S&P/ASX200, and offer this vehicle to investors at the lowest cost possible. This has…