China’s deflating property market threatens wider economic trouble
China’s woes could prove to be the global economy’s biggest blow The Reserve Bank of New Zealand a year ago became the first advanced central bank to raise interest rates to cool its economy to tackle inflation. So far, the RBNZ has lifted its key rate seven times. The Bank of England, starting last December,…
The Mint and Note Printing Australia make billions for Australia
Briefly, in the days after the death of the queen, we were afforded a glimpse into the machine that makes Australia’s money. Assistant Treasury Minister Andrew Leigh turned up at the Royal Australian Mint to explain the process by which a portrait of the King Charles will replace the portrait of the queen on the…
Will the economy go into recession?
The Reserve Bank is aggressively lifting interest rates from super-stimulatory levels to levels that more appropriately reflect the strong state of the economy. But could the aggressive moves lead to recession? A “technical recession” being defined as two consecutive quarters of economic contraction. The Reserve Bank has warned that it is treading a narrow path…
Macro-economic themes for the year ahead
The Perpetual Equity Investment Company Limited (ASX:PIC) recently announced its full year results for FY22. Portfolio Manager and Deputy Head of Equities Vince Pezzullo provides a market overview, explains how he is positioning the portfolio as a result and names some stocks to watch in FY23. FY22 was one of the most unique and volatile years…
Is China about to become a source of global inflation?
The recent period of red-hot goods inflation has snapped decades of disinflationary pressure since China emerged as a low-cost manufacturer. The nature of the recovery from the Covid-19 pandemic has of course contributed to rampant goods inflation, given that lockdowns skewed demand into the goods sector and interrupted supply chains. Goods inflation should come down…
Higher US interest rates test the world
A high US dollar exporting inflation, a shrinking US economy and struggles in emerging countries stand out as challenges. New York’s Plaza Hotel, in financial circles, is best known for when the finance ministers of France, Japan, the UK, the US and West Germany gathered in 1985 to suspend the free-float of the US dollar….
Why unemployment is set to stay below 5% for years to come
Unfathomably, Australia’s unemployment rate has sunk to 3.5%. Even harder to believe is that it will soon sink lower – perhaps even this week, when the update is released on Thursday – and after that, if the ANZ’s forecasts are correct, dip below the next threshold to two-point-something for the first time since 1974. That…
Inflation is 2022’s boogeyman
An entire generation has never experienced life with high inflation. But that is set to change. Countries like Australia, Canada, the United Kingdom and others are reporting rising inflation. In New Zealand, inflation has climbed to its highest rate in 32 years. Our collective inexperience with the scourge of inflation, and how to solve it,…
How worried should we be about inflation?
Inflation at its present level is certainly a concern. It will be more of a concern if inflation stays high over a sustained period. Already we have seen evidence of inflation eating into the disposable incomes of families and reducing the profitability of some companies. Even so, shares have rallied moderately well since the US…
The recession everyone sees coming
Right now, the market is trading based on one issue: inflation. This week was a bad one for inflation. The selloff in oil and industrial commodities continued. Since last Friday, WTI crude has fallen over 11% and gasoline futures are down ~12% from recent highs. Copper is in its worst 10-day selloff since March 2020, when the whole world…
