INVESTMENT UPDATES

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October 14, 2019

WEEKLY INVESTMENT UPDATE

Key points:

  • The White House agreed to a 'first phase' interim trade deal with China, despite the president having said he wouldn't.

  • The British government is now vigorously pursuing a deal with the EU, after Boris Johnson had said

    that the UK was prepared to leave without one.

  • The Federal Reserve began expanding its balance sheet by

    $60bn per month, after ending quantitative tightening only two months ago.

 

 

 

 

 

 

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October 7, 2019

WEEKLY INVESTMENT UPDATE

Key points:

  • Chinese Vice-Premier, Liu He, travels to Washington for the main event this week; the latest round of trade talks between the US and China. If no agreement is reached, higher tariffs on $250bn of Chinese imports will be applied next week. In the unlikely event that a deal is announced, we expect equity markets to be jubilant.

  • RBA Cut rates last week by 0.25% to record low.

  • RBA’s recent Financial Stability Report has a more dovish tone and explicit support for the housing market.

  • US labour report has worrisome leading indicators for wages and future employment. We expect further easing from the Fed and probably more Quantitative Easing (QE).

 

 

 

 

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September 30, 2019

WEEKLY INVESTMENT UPDATE

Key points:

  • US & UK politics erupt. In the US, the shape of the Presidential election has changed.

  • European PMIs and confidence surprised to the downside. In contrast, US data appears to be responding to interest rate cuts.

  • The October US-China trade negotiations do not seem to be progressing well. The result will have implications for Fed policy, where a relaunch of QE seems increasingly likely, possibly with further interest rate cuts.

  • Japan and the US are widely expected to reach a trade deal in the coming weeks.

  • The RBA will meet on Tuesday, and the market expects a 0.25% cut in the cash rate. We think November is more likely.

 

 

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September 23, 2019

WEEKLY INVESTMENT UPDATE

Key points:

  • Fed cuts rates, as anticipated, and intervenes in bond markets as liquidity dries up. QE is likely to return for Fed, albeit in softer than previous volumes.

  • OECD cuts global growth forecasts, citing the worldwide decline in confidence.

  • In Australia, the RBA looks more likely to cut rates in October following softer employment figures.

  • Trade saga continues with Trump indicating no haste to resolve partially.

 

 

 

 

 

 

 

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September 16, 2019

WEEKLY INVESTMENT UPDATE

Key points:

  • Markets showed signs of optimism last week as the ECB relaunched QE.

  • Economic data does not yet support the rebound in sentiment, which is driven more by the suggestion that the trade dispute between the US and China, and Brexit will not darken the outlook as much as feared.

  • The central banks of the US, Japan, the UK, Switzerland and Norway will meet this week. The Fed is almost certain to cut the Fed Funds rate to the 1.75%-2% range.

 

 

 

 

 

 

 

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September 9, 2019

WEEKLY INVESTMENT UPDATE

Key points:

  • Equity markets and the Australian dollar were lifted last week by brighter Chinese data, the announced resumption of trade talks, further Chinese stimulus, and the dissipation of certain tail risks;

  • There is no sign yet of a global reacceleration. US data is deteriorating at an alarming pace. Further monetary stimulus is expected from the Fed and ECB;

  • American valuations are at a significant premium. Emerging Markets and Asia are looking more favorable.

 

 

 

 

 

 

 

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