Conferion

Paris 2024 Olympics 🇦🇺 Australia Goes for Gold 🇦🇺 -- Don’t pardon my French – join me! Au revoir to the Paris Games and applause for our champions; each and every member of the Australian Olympic Team!! 🇦🇺 👏🏽 🇦🇺 Australia celebrates our most successful Olympic campaign yet, with more gold medals than ever. 🥇 18 Gold 🥈 19 Silver 🥉 16 Bronze To my readers; I hope the Olympics inspires you as it does me. Whatever individual or collective challenges we may face, there is something each of us can draw from the fact that despite being 50th by world population, the Australian Olympic Team managed to rank our great nation amongst the top 5 in the world. As we say in Australia - “go for gold!!” -- Medal Table https://lnkd.in/gMcYsX4x YouTube 👍🏽 🔔📲 https://lnkd.in/gXTNYYfE Reading and Resources Australian Olympic Committee | International Olympic Committee – IOC | Paris 2024 - Comité d'organisation des Jeux Olympiques et Paralympiques de 2024 #Australia #LinkedinNews #LinkedinNewsAustralia #Olympics #Paris2024 #Sports

August 2024: The Sahm Rule -- In a nutshell: Recent jobs data has triggered the “Sahm rule” and sparked speculation that the US may be entering a recession. Questions have also been raised as to what the implications are for Australia should the US go into recession. Broadly-speaking; our sharemarket would likely experience volatility, but not necessarily for a prolonged period. Our property market on the other hand may indirectly benefit from rate cut by the US Federal Reserve (the Fed), as it would hasten chances of the same by the Reserve Bank of Australia (RBA). Lower rates would promote an acceleration in Australian property values. -- So, what is the Sahm rule? Claudia Sahm recently explained it best herself: “This rule, later named after me, is simple and highly accurate (historically) by design: When the three-month average of the US unemployment rate is 0.50 percentage point or more above the low of the prior 12 months, the US is already in a recession. Since 1970, the rule correctly indicates every recession and does not trigger outside of one.” Win Sahm, lose Sahm 🔘 US unemployment May 4%, June 4.1%, July 4.3%; 🔘 US is not in a recession yet but heading that way; 🔘 Recession not inevitable but Fed should cut rates. The slump in July triggered the Sahm rule and speculation that the US is either entering or already in a recession. With respect to the latter; Claudia believes that the Sahm rule is being overstated and that the US is not in a recession. She does however acknowledge that the increase in unemployment over the last year is disconcerting and the Fed should no longer delay cutting rates. She supports her view by highlighting that the current economic cycle is different to cycles past due to the unprecedent influence in supply and the labour market caused by the pandemic. Advance Australia Fair 🔘 A rate cut by the Fed would encourage the RBA; 🔘 Cuts to the cash rate would stimulate the market; 🔘 Australian property values would likely accelerate. It should be noted that whilst some volatility in the Australian stockmarket might ensue from a US recession, the impacts are unlikely to last long. -- YouTube 👍🏽 🔔📲 https://lnkd.in/gQRRXayX Commonwealth Resources Australian Bureau of Statistics | Commonwealth Treasury | Reserve Bank of Australia Further Resources and Reading Bloomberg | Bloomberg News | CNBC | Conferion | Council of Economic Advisers, The White House | Dough Financial | Federal Reserve Board | Greenrock®️ | Iress | New Century Advisors, LLC #LinkedInNewsAustralia #RBA #Recession #SahmRule #USFederalReserve

August 2024: Cash Rate Outlook -- In a nutshell: Borrowers looking ahead to the next move by the Reserve Bank of Australia (RBA) may have had hopes for a rate cut this year quashed by recent forecasts. Optimism may be buoyed however by a longer-term outlook that indicates we may see numerous reductions to the cash rate in 2025. The outlook is supported with recent moves by foreign central banks. Australia is typically directionally-led by the US Federal Reserve (the Fed) which is likely to cut rates, further bolstering hopes for a cut. -- At the risk of quoting a well-known internet entrepreneur, “here in my garage” (Google it, lol) I was about to set-off when the “N” on the shifter caught my eye. Voilà; the idea for this post was born. Neutral in a vehicle gearbox is conceptually similar to its cash-rate counterpart. In economic theory, it is the concept of an interest rate that will neither be contractionary nor expansionary. Economic growth cruises along and inflation remains in-check. Rates of savings and investment are also at desired levels, with balance between the latter-two supporting the former. It is important to take note that the neutral rate is but a guide, an oft-moving target. In the face of its limitations however, the neutral rate remains a guiding factor for financial markets seeking an outlook on interest rates. The neutral rate is mostly a global concept and this ties-in nicely with the fact that the RBA tends to be directionally-led by the Fed. Pressure is mounting on the Fed to cut interest rates, which is good news for Australian borrowers seeking interest rate reprieve. Cash Rate Events and Outlook 🔘 Bank of England cut rates for the first time since March 2020 to 5%; 🔘 The Fed is expected to cut rates back in September from 5.25-5.5%; 🔘 Numerous cuts by the RBA are likely from February, landing at 3.6%. Luci Ellis made a keynote address on the topic of the neutral rate, one of the best on the topic I have come across. I highly recommend a read if you are interested, link below. __ The Neutral Rate: The Pole-star Casts Faint Light https://lnkd.in/gbnTnG9q YouTube 👍🏽 🔔📲 https://lnkd.in/guFE_XmX Commonwealth Resources Australian Bureau of Statistics | Commonwealth Treasury | Reserve Bank of Australia Further Resources and Reading Bank of England | Bloomberg | Central Bank Research Association (CEBRA) | Conferion | Dough Financial | Federal Reserve Board | Google | GREENROCK®️ | Heidelberg University | Thomson Reuters | Universität Wien | University of Vienna #ABS #AustralianEconomy #BankofEngland #BoE #EconomicInsights #Inlfation #InterestRates #LinkedInNewsAustralia #RBA #USFederalReserve Sound on 🔥🔊🎧🔥

EOFY 2023-2024: Dough Financial Economics -- In a nutshell: End of financial year (EOFY) results for the ’23-24 reporting period saw headline inflation rise to meet expectations of both the Reserve Bank of Australia (RBA) and the market. On the other hand the RBA’s preferred measure, the trimmed mean landed right in-between. As a result, the futures market has now eliminated odds of a rate hike and pegged a cut early next year. Calling a rate cut may be premature however; as the Bank’s unemployment target has not been met and inflation remains high. -- I recently outlined the roller-coaster ride that cash rate market predictions have been on this calendar year; and it looks like the fair has been paid-up until at least the recent financial year. I also recently commented on how, when factoring in the base effect, interest rates are actually coming down. The latest data confirms this is the case, with core inflation firmly heading in the right direction – and the market reflecting a more positive outlook on the cash rate. CPI Data and Cash Rate Outlook 🔘 Headline inflation rose from 3.6% to 3.8% as broadly expected; 🔘 Trimmed mean came in lower than expected from 4% to 3.9%; 🔘 Odds of a rate hike have been eliminated, cut expected Feb ‘25. There is no doubt that market predictions of a rate freeze and cut will appeal to many, not the least those who are having the candle burn at both ends of the stick with high debt repayments and cost of living pressures. Unfortunately, it may be too early to make such predictions just yet; as the unemployment rate remains materially below where the RBA wants it to be before rate cuts can be a sure bet. Oh, and then there’s inflation.. -- The Base Effect https://lnkd.in/gmFQNc-M YouTube 👍🏽🔔📲 https://lnkd.in/gxxNsws3 Commonwealth Resources Australian Bureau of Statistics | Commonwealth Treasury | Reserve Bank of Australia Further Resources and Reading ANZ | AMP | Commonwealth Bank | Conferion | Dough Financial | GREENROCK®️ | IFM Investors | Macrobond Financial | NAB | Westpac #Economy #Inflation #LinkedinNewsAustralia #Rates

EOFY 2023-24: GREENROCK®️ Housing Market -- In a nutshell: Australian home values closed the ’23-24 end of financial year (EOFY) reporting period on a high note. A turnaround from the previous financial year when values were down, dwelling prices have shown resilience in the face of high interest rates and low affordability. Weakening economic conditions have also failed to dampen value growth, although contrasts have continued to sharpen between capitals and amongst regions. Rental value growth continues to slow, driven by a softening of already-high capital city unit rents. -- Last financial year was meant to be a perfect storm against the Australian property market; the cash rate was lifted a year ago, held in place then raised again late last year for the rest of the financial year. Economic output and consumer sentiment alike have suffered throughout the period, as has productivity and any optimism for rate cuts. In spite of all of that; house prices continue to rise. Purchase Market Overview 🔘 Australian home values increased 8% over the 2023-24 financial year; 🔘 Results were a reversal from -2% decline in the 2022-23 financial year; 🔘 Outliers were Perth 24%, Brisbane 16% and Adelaide 15% for the year. The key feature of markets experiencing strong growth is a chronic shortage of properties advertised for sale, with the opposite true for areas on the other end of the scale. Interstate migration has also been a key driving factor behind accelerated growth trends and this is expected to continue for now. Growth in rents has continued to soften, albeit off the back of abnormally high growth in recent years. This is most apparent in the capital city unit sector where rental-fatigue has begun to set-in. The trend has become more apparent since late last year, coinciding with the most recent rate hike when it is likely that investment property owners began to pass-on higher ownership costs to renters. Rental Market Overview 🔘 Growth in rents slowed to 0.4% for the month and 8.2% over the year; 🔘 Results were softest since September and November 2023 respectively; 🔘 Slowdown driven by capital city unit rents which are 22% over 2 years.                                                          Overall, the key downside risk to the Australian residential property market remains interest rate uncertainty. It should be noted however that this risk has more to do with borrowing capacity than consumer sentiment, as recent buyer behavior indicates that demand continues to outstrip supply. __ Commonwealth Resources Australian Bureau of Statistics | Reserve Bank of Australia Further Resources and Reading AMP | ANZ | Commonwealth Bank | Conferion | CoreLogic Australia | Dough Financial | GREENROCK®️ | NAB | Westpac #HousingMarketUpdates #LinkedinNewsAustralia #Outlook2024 #PropertyInvestment #RealEstateInvestment

July 2024 Update: Unemployment Rate -- In a nutshell: Reporting by the Australian Bureau of Statistics (ABS) indicates that domestic unemployment has remained largely unchanged this year. Whilst this is broadly viewed as favorable in the face of high interest rates, it is problematic for the Reserve Bank of Australia (RBA). The Bank has indicated that rate hikes cannot be ruled-out unless unemployment rises further. Given that private-sector growth has already stalled, further rate hikes would mean further tests on Australia’s fatiguing economy. -- “Jobs can change a lot without there being huge changes in employment rates.” – David Autor -- Take two of your digits, place them on the screen you are viewing the ABS unemployment trend line on and zoom-in on 2024. You will see a flat line that is both a depiction of the unemployment rate and symbolic of economic growth in Australia this year. On this basis, many would argue that the RBA has done its job and monetary-tightening can ease; at least, in theory. The Bank has sought to increase unemployment to the point that consumer confidence and spending alike are muted, curbing inflation. The RBA’s target unemployment rate is yet to be met however, meaning that we may yet be faced with further rate hikes to help expediate the metric. The trouble is that whilst private sector unemployment remains weak, the non-market sector – particularly healthcare - is responsible for any meaningful employment growth. This aligns with data which indicates that inflation is coming from essential spending, such as healthcare – and not because businesses are booming. In fact; the opposite is true, as evidenced by hours worked. Employment Overview 🔘 Unemployment remains largely unchanged in 2024 at 4.1% in both January and June; 🔘 50K jobs were created but there are also around 10K additional unemployed people; 🔘 Participation rate 0.1% with hours worked traded from private to non-market sector. Advertised Jobs Data 🔘 Number of advertised jobs down almost 2% for the month and -17% over 12 months; 🔘 Leading jobs website measure of candidate availability, number of applicants up 3%; 🔘 Advertised salaries remain aligned with ABS wage price index at 4% but are softening. Overall; our economy is headed toward what is known as a soft landing. It is widely-expected that although the latest unemployment data will be a consideration at the next RBA meeting in August, the major influence on an interest rate decision will be the June quarter inflation data. -- YouTube 👍🏽 🔔📲 https://lnkd.in/gyvkGR9x Commonwealth Resources Australian Bureau of Statistics | Commonwealth Treasury | Reserve Bank of Australia Further Resources and Reading ANZ | Commonwealth Bank | Conferion | Dough Financial | GREENROCK®️ | Macrobond Financial | NAB | SEEK | The Australia Institute | Westpac #AustralianEconomy #Economics #Employment #Inflation #InterestRates #LinkedinNewsAustralia #Unemployment

Les Trois Mousquetaires.

EOFY 2023-2024: Inflation and Rates -- In a nutshell: Australia’s ‘23-24 end of financial year (EOFY) closed on the sour note of high inflation. Consumer sentiment and the labour market alike have been battered by high interest rates; and high inflation means a low chance of reprieve. Whilst the market has responded to the latest inflation data by elevating the forecasted risk of rate hikes, how the Reserve Bank of Australia (RBA) will actually respond remains to be seen - as the way inflation data is reported can be interpreted differently. -- I believe it was Ray Dalio who once said; “He who lives by the crystal ball will eat shattered glass.” As we enter a new financial year in a world increasingly filled with noise from financial foretellers, it is important to review how they are faring thus far this calendar year before making any decisions. Hike Risk 🔘 2024 began with the market predicting around 2 rate cuts by August; 🔘 Odds of rate cuts all but disappeared by June following inflation data; 🔘 Rate hikes predicted at August 30%, September 50%, November 80%. Keeping in mind that rate predictions are largely driven by inflation data, we must take a step back to understand the reporting itself when seeking context. Whilst it is well-known that the consumer price index (CPI) measures the percentage change in the price of goods and services, few understand that the inflation data itself is reported using a previous point in time for reference, or a base. Influence of the base on reported inflation is referred to as the base effect and can distort how the information is interpreted. Examining changes to the monthly indicator shows us that inflation is actually falling. Get Based 🔘 Headline CPI is 4% and the trimmed mean is 4.4%, above 2.5% target; 🔘 Inflation data reporting was from the May 2023 to May 2024 period; 🔘 The monthly inflation indicator for May this year has dropped by 0.1%. It is clear that factoring in the base effect provides a more optimistic view; the question is whether the RBA will share this view at the next meeting. -- YouTube 👍🏽 🔔📲 https://lnkd.in/gkQZTjHV Commonwealth Resources Australian Bureau of Statistics | Commonwealth Treasury | Reserve Bank of Australia Further Resources and Reading ANZ | Bloomberg | Business Insider | CNBC | Commonwealth Bank | Conferion | Dough Financial | GREENROCK®️ | Macrobond Financial | NAB | The Australia Institute | Westpac | Yahoo Finance #AustralianEconomy #Economics #EndofFinancialYear #EOFY #financial #financialyear #inflation #interestrates #linkedinnewsaustralia #rba

June 2024 Update: Dough Financial Economics -- In a nutshell: The cash rate pause is set to continue into the new financial year as the Reserve Bank of Australia (RBA) left it unchanged this month. It was however a hawkish pause as the RBA warned the next move for the cash rate may be upwards if the rate of inflation does not ease. The challenge is that as the cost of non-discretionary expenditures and proportion of mortgage arrears alike continue to rise, so does the likelihood that a rate hike this year could be damaging to the Australian economy. -- A bit of a “three-musketeers” situation seems to be unfolding between Australia and two of the world’s leading central banks. The RBA, US Federal Reserve (the Fed) and Bank of England (BoE) have demonstrated an unwavering resolve to hold guard of their respective cash rates despite recent cuts by other central banks. A Cause for Pause 🔘 US Federal Reserve Board kept the effective funds rate at 5.33%; 🔘 Reserve Bank of Australia left the cash rate unchanged at 4.35%; 🔘 Bank of England despite only 2% inflation held the rate at 5.25%. For Australians, whether or not the Fed, RBA and BoE are actually banding-together is less relevant than the consequential nature itself of respective decisions to leave cash rates on hold. The domestic influence of international events is very much a reality down-under, notwithstanding potential lessons for our own outlook. The most sobering lesson this time around has been from the BoE; that despite inflation coming well-within target, the cash rate can still be held higher for longer. The June Tune 🔘 Market predictions were for a February 2025 RBA cash rate cut; 🔘 Predictions for a rate cut by next year have been revised down; 🔘 Best-case likelihood of an RBA rate cut is 50% by February 2025. It is worth noting that there has been a slight uptick in consumer sentiment despite cost of living pressures and rising unemployment, promoting the case for a potential rate hike this year. -- June 2024: Interest Rate Outlook https://lnkd.in/gSmNSF4F YouTube 👍🏽 🔔📲 https://lnkd.in/grWUfu7W Commonwealth Resources Australian Bureau of Statistics | Reserve Bank of Australia Further Resources and Reading AMP | Bloomberg | Bureau of Labor Statistics | Conferion | CoreLogic Australia | Dough Financial | Federal Reserve Board | GREENROCK®️ | LSEG (London Stock Exchange Group) | LSEG Data & Analytics | Melbourne Institute | Office for National Statistics | TRADING ECONOMICS | Westpac #economy #linkedinnewsaustralia #rates

June 2024 Update: GREENROCK®️ Housing Market -- In a nutshell: Home value growth accelerated in Australia last month and a new order was formed. Brisbane now has the second-highest median dwelling value and prices in Sydney are recovering. Rental value growth has decelerated off the back of an upward trend, however gross rental yields have swelled to a 4-year high. The common theme across both purchase and rental markets is a supply-demand imbalance. -- 1997 was a memorable year for some, and the reasons depend on who you ask. Movie buffs may recall the Titanic’s cinema debut and those with a sweet-tooth might tell you it was when the ice cream flavour Phish Food was released. Oh, and then there are Australian residential property market experts; they could be the ones who tell you it was when Brisbane became Australia’s second most-expensive capital city by median value.. and after close to 30 years, it’s happened again. Purchase Market Overview 🔘 Australian home value growth accelerated to 0.8% in May 2024; 🔘 The 16th consecutive month of growth and largest since October; 🔘 Perth maintained 2% growth whilst Brisbane overtook Canberra. The variation in growth rates and change in hierarchy by median value is largely explained by differences in available supply and internal migration. Differing growth rates by locality continue to be apparent, as home values experience multi-speed rates of growth due to higher borrowing costs. Rental growth is at an interesting point. Although the pace of growth in rental values has continued to soften, rents have continued to rise overall. The cumulative effect is that gross rental yields are at the highest point in recent years, although it is still expected that highly-leveraged investors who purchased over the same period are likely experiencing negative cashflow due to interest rates. Rental Market Overview 🔘 Growth in rents continued to soften, slowing to 0.7% last month; 🔘 May 2024 saw the lowest monthly change since December 2023; 🔘 Despite the slow-down, gross rental yields are sitting high at 3.8%. Affordability of the cost of shelter is expected to continue to be eroded by higher ownership and rental costs alike. The supply-demand imbalance can be best summarized by a near-20% shortfall in supply and an almost 10% uplift in demand, relative to averages. Despite a recent uptick in dwelling approvals, the fundamental issues of skilled-labour shortages and high building costs mean we are yet to see a meaningful supply-response. -- Commonwealth Resources Australian Bureau of Statistics | Reserve Bank of Australia Further Resources and Reading AMP | ANZ | Ben & Jerry's | Commonwealth Bank | Conferion | CoreLogic Australia | Dough Financial | GREENROCK®️ | Lightstorm Entertainment | Paramount Pictures | Westpac #housingmarketupdates #linkedinnewsaustralia #outlook2024 #propertyinvestment #realestateinvestment