Laura Ryan PhD

***The Shortlist*** Equity markets rallied to record highs on hopes of a soft landing after the US Federal Open Market Committee cut rates by 50bp. We forecast an additional 150bp of cuts this cycle. Listen to my commentary in today’s ‘5 in 5 with ANZ’ podcast 🎧 https://lnkd.in/g3b9d_JA Also in a surprise move, Bank Indonesia cut its policy rate by 25bp, as it anticipates an aggressive US easing cycle. Taiwan’s monetary policy is set to diverge from regional peers, as the central bank looks like it will keep its policy rate at 2% through 2025. We continue to expect the RBA will start its easing cycle in February 2025, but risks have tilted toward a later start, given current labour market momentum. We have launched a thematic Global Carbon Market Chartbook. We report global carbon offset supply fell in August. We expect prices across some carbon markets to inch closer together in 2024, as new programs break records and mature schemes cool. Registered ANZ clients can view the Shortlist and our research reports at www.research.anz.com Podcast: Listen to 5 in 5 with ANZ at https://lnkd.in/g_K3pYVh Stay connected via ANZ Institutional or Follow us on X (Twitter) https://x.com/ANZ_Research

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***The Shortlist*** The pace of monetary easing is diverging. The US Federal Reserve's communications are stressing a patient approach to policy easing, and there is considerable uncertainty over the level of the neutral federal funds rate. In Australia, we anticipate a delayed and shallower easing cycle. In contrast, the RBNZ reduced its policy rate by 50bp. A repeat performance is likely in February. The ANZ Business Outlook survey suggests the economy is responding. 🎧 Listen to today's '5 in 5 with ANZ’ for our latest commentary on the rate calls in Australia and New Zealand https://lnkd.in/g7K4X76M Revising down its 2025 growth outlook, the Bank of Korea lowered its policy rate by 25bp. Deteriorating economic conditions in the euro area are arguing for a more stimulatory monetary framework. In FX, we analyse the historical downtrend of the AUD against the USD.* There are crosscurrents* for the NZD. In credit, we anticipate investment growth returns to be negative this quarter with new issues no longer offering alpha. In Papua New Guinea, we expect growth to ease in 2025 after an impressive performance this year. Indonesian authorities will find it challenging to structurally lift growth. Registered ANZ clients can view the Shortlist and our research reports at www.research.anz.com Podcast: Listen to 5 in 5 with ANZ at https://lnkd.in/g_K3pYVh Stay connected via ANZ Institutional

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*** The Shortlist *** In New Zealand, we expect the RBNZ to leave the OCR at 5.5% this week, reiterating that the central bank remains in a 'watch-worry-wait' mode. Since the February MPS, data have pointed in different directions. Inflation data have been sticky, but recent activity and labour market data have tilted to the softer side of expectations, and there is a growing risk that the economy could have a harder landing than anticipated. The Australian Budget 2024-25 showed a surplus of AUD9.3bn in 2023-24. The policy focuses on cost-of-living measures and the 'Future Made in Australia' package. In our view, the discrepancy between the Treasury's forecast of headline inflation in Q2 2025 (2.75%) and that of the RBA (3.2%) is largely attributable to the cost-of-living relief measures not being factored into the RBA's forecasts. Read article 📖 https://lnkd.in/gHe_fqXn 🎧 Listen to our RBA and RBNZ commentary in today’s ‘5 in 5 with ANZ’ https://lnkd.in/gzFpdS8z Australia’s Wage Price Index rose 4.1% y/y, which was below expectation, and the labour force survey was mixed. However, there is no change in our view of the first cut materialising in November, with risks skewed toward a later start. More than 10 Chinese cities have upgraded their utility charges. We note that utility rate hikes will have a marginal impact on China’s inflation because they are driven by the fiscal pressure of local governments and not the policymakers’ reflationary strategy. In commodity markets, China’s strong gold demand explains the disconnect between the gold price and the macro backdrop, with gold demand expected to remain relatively strong in 2024. We also explore various scenarios that could play out for oil prices at next month's Opec+ alliance meeting. In credit, China risks experiencing the greatest pivot in investor sentiment. The big test is whether this would spread beyond Asia portfolios and be more lasting in nature. Registered ANZ clients can view the Shortlist and our research reports at www.research.anz.com Podcast: Listen to 5 in 5 with ANZ at https://lnkd.in/g_K3pYVh Stay connected via ANZ Institutional or Follow us on X (Twitter) https://lnkd.in/gtyP2E-v

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The current recession is deeper than the GFC and will likely be longer. Bit late to the GDP data. The NZ economy shrunk slightly in Q2 2024. On a per capita basis, which is a proxy of how well off we are, it just continued a trend since Sep-22 (left chart). So far this recession has been about a significant decline in profits, while wages paid to workers had been going sideways, there have been job losses since March. These job losses are uneven across regions - to date concentrated in Auckland, Wellington and Canterbury. No its not just the government downsizing (which hasn't even shown up in the data yet), the private sector recession has been the main driver. The experience across industries is pretty broad based. Services provided by professional and administrative services and government (both central and local) are holding up above pre-pandemic levels (right chart/illustration). RBNZ's forecasts suggests there is more pain to come until the end of 2024 and that the recovery will be slow (we will not get back to pre-recession levels until maybe the end of 2028). This is much worse than the GFC. At the human level this means more job losses and more business closures. RBNZ needs to urgently reduce interest rates and government should fast track investment in infrastructure, and look to supercharge vocational training with good welfare safety nets. Don't hold your breath for these things to happen of course: ideology (both at RBNZ and government) trumps pragmatism. Businesses should look carefully at their cash flows and do what they must to operate in this difficult trading backdrop. For savvy operations, it is time to pick off weak competitors, gain market share and hire skilled people. Invest in marketing and training (within your budget) - the downtime is the time to do it. You will be too busy when the recovery comes. For individuals, it is about being realistic. A weak economy means fewer job choices, less bargaining power and more stress. We are seeing a massive increase in KiwiSaver hardship withdrawals for example. Talk to people you trust (financial mentor, family, friends or colleagues) - you are not alone and help is available. Recessions are very hard on some people. Ask for help if you are impacted, give help if you can. A long and difficult journey is easier together.

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NZ filled jobs (our equivalent of the US payrolls data from the survey of establishments) fell -0.1% in June. I’d been expecting something a bit softer, but then the April and May results were revised down to -0.2% and -0.3% respectively. You need to go back to the GFC to find three consecutive monthly declines in this data. The annual rate of growth is now +0.2%. This supports our suspicions of a weak HLFS report next week. We’re expecting employment to fall -0.2% in the June quarter and for the unemployment rate to rise to 4.7% from 4.3% in March.

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+6.9% #Performance Macro+A Aug. You can continue to grow your wealth in bear markets as well as bull markets. Do not be put off by the stock market CRASH! Global Macro+Active Diversified Individually Managed Accounts www.cliffordbennett.com.au

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The just-released national accounts show the Australian economy hit stall speed in Q2. PinPoint Macro Analytics GDP Chartpack, sourced from the Macrobond Financial database, highlights the main outcomes and implications of the quarterly snapshot.  Read on! PinPoint Macro provides access to more than 4,000 automatically updating charts covering the major economies and financial markets. Visit our website to access our full chart library and sign up for a free trial! www.pinpointmacro.com Or you can subscribe to our Chartpacks. And even let us design one suited for your needs. Contact us on info@pinpointmacroanalytics.com.au. #GDP #australianeconomy #RBA #inflation #households #consumerspending #capex #publicspending #interestrates #unemployment #fiscalpolicy #livingstandards #recession

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USD50 billion NZ Super Fund is looking to incorporate alternative signals as a way to improve its strategic tilting strategy. This complements a broader assessment of tail risk strategies under its total portfolio approach. https://lnkd.in/eFey9CJi

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Could be a MEGA-TOP in Nvidia. We have been short for some time. Start with free reports or become a member at cliffordbennett.com.au #nvidia #apple #blackrock #us500 #gold #oil #trading #investing #geopolitics #politicaleconomy #economics #global #wealth #familywealth

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There is plenty to analyse, and #5in5withANZ helps thrive as you deep dive into the issues of the day.

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Even the lucky country is finding inflation to be a bit sticky. Australian inflation came in higher than expected today. The market was looking for an increase of +0.8% for both headline and trimmed mean (the RBA’s preferred underlying measure) inflation, but both came in at 1.0%. The annual rate of trimmed mean inflation is still 4%. Hope was starting to build in markets about the possibility of early cuts to the cash rate, but the sharp move higher in 2-year bond yields after the result showed the disappointment on that front. I think the RBA will be on hold this year with rate cuts unlikely until early next year.

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Continuing on with PinPoint Macro Analytics recent central bank theme, this new Chartpack, sourced from the Macrobond Financial database, looks at what we can expect now that the Reserve Bank of New Zealand has commenced a rate cut cycle. During the first year of previous RBNZ easing cycles: . GDP growth typically accelerates and unemployment falls (COVID cycle in 2020 is the exception); . inflation rates typically continue to slow; . dwelling price growth unambiguously accelerates; . the trajectory for share prices and 10-year bond yields is mixed – but more recent easing cycles have seen share prices rise and bond yields fall; . the NZD/USD typically rises – often by a significant amount; and . there is no consistent pattern to NZ commodity prices but the average monetary easing cycle is associated with a fall in prices. PinPoint Macro provides access to more than 4,000 automatically updating charts covering the major economies and financial markets. Visit our website to access our full chart library and sign up for a free trial! www.pinpointmacro.com Or you can subscribe to our #Chartpacks. And even let us design one suited for your needs. Contact us on info@pinpointmacroanalytics.com.au. #trbnz #monetarypolicy #NZmonetarypolicy #interestrates #GDP #CPI #unemployment #houseprices #commodityprices #volatility #equities #NZX50 #stockmarket

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Following the excellent article in the AFR about the "Wealth Effect," also see the presentation from Livewire Live. In this article, I detail the social, investment, and monetary policy effects of Australia's substantial and expanding superannuation pool. https://lnkd.in/gqrFCGCq https://lnkd.in/gBspnjRa #superannuation #wealth #investment #afr #livewire #investing #property

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This week, we pose seven questions on the RBA. What are they doing, what should they do and what will they do? Take 5 to read our take on these topical RBA questions. https://lnkd.in/dAMU5YPV

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Some compelling charts from Torsten Slok at Apollo. The US economy hasn’t slowed with policy tightening. Rate rises prevented further outperformance. US outperformance will have implications for the USD and the NZD if sustained. That’s why we see NZD underperformance ahead. If correct then we will need domestic service sector inflation to decline to keep the CPI close to 2%. That’s why the RBNZ has not been gung-ho in suggesting stimulatory interest rates are required.

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2REASON TRADE WITH OUT Idea for the day, to be expanded upon in a later report in the next few days: How Australian Stocks and Property could soar while the economy goes into recession or worse? Answer: Severely ratcheted up risk of expanded war/s drives US investors toward Australia. While any sign of conflict with China accelerates an already headed for Australian recession. visit and say hello at www.cliffordbennett.com.au 

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