In today’s show I want to delve into three important issues, which I do not think the mainstream media gave sufficient weight and consideration to.
The first relates to the market interest rate assumptions which drives the RBA models, the second concerns the use of cash and the impending upending of current arrangements in July, and the third, the question of the fate of Australia’s Gold, and what is happening to physical Gold more broadly. For each I will add my own analysis.
So as always, as questions are asked and answered, actually more questions are raised. But to me these three questions, the link between Bank modelling and market assumptions on interest rates, the use and availability of cash, and the physical gold market, are all ones to watch.
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Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
Big Questions About Gold, Cash And Interest Rates!
In today’s show I want to delve into three important issues, which I do not think the mainstream media gave sufficient weight and consideration to.
The first relates to the market interest rate assumptions which drives the RBA models, the second concerns the use of cash and the impending upending of current arrangements in July, and the third, the question of the fate of Australia’s Gold, and what is happening to physical Gold more broadly. For each I will add my own analysis.
So as always, as questions are asked and answered, actually more questions are raised. But to me these three questions, the link between Bank modelling and market assumptions on interest rates, the use and availability of cash, and the physical gold market, are all ones to watch.
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is our weekly market update where we start in the US, cross to Europe and Asia and end in Australia, covering commodities and crypto along the way.
When UK Prime Minister Harold Macmillan was asked what was the greatest challenge for a statesman, he replied: ‘events, dear boy, events’.
This is highly relevant to this week’s market review, because they were whipsawed through the trading day asking what is a negotiating gambit and what is a serious policy proposal. After opening higher, they sank mid-session during a public berating of Ukrainian President Zelensky by President Trump and Vice President Vance at the White House. Zelensky is “not ready for Peace if America is involved,” Trump said in a post on Truth Social afterwards.
But, US investors shook off the volatility through mid-afternoon and then pushed still higher leading into the closing bell so that all three US benchmarks rallied, with financials leading all 11 of the S&P 500 industry sectors higher. As a result, The S&P 500 climbed 1.59% The NASDAQ gained 1.63%, while the Dow Jones Industrial Average rose 1.39%. The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 7.10% to 19.63.
Across the week, the Dow was up 0.95%, the S&P 500 was down 0.98% and the NASDAQ was down 3.47%. Both NVIDIA and Tesla rallied to finish the week, rising 4 per cent and 3.9 per cent respectively, but were still down 7% and 13% for the week. Shares of NVIDIA which reported earnings late Wednesday, swung to losses as investors focused on signs of increased AI spending in the industry.
The MSCI global index was up 0.66% on Friday, but still down 1.33% for the week, while the STOXX 600 European index was up another 0.6% across the week after touching a record high on Wednesday. Australia’s ASX 200 rounded off earnings season on a negative note, slipping 1.2 per cent, to post its second consecutive month of losses, tumbling 4.2 per cent in February wiping out all gains this year.
The level of uncertainly across markets is reaching fever pitch, and we can expect to see more volatility as the world order is shifting under our feet. On Tuesday I will be discussing the implications for investors with Damien Klassen from Nucleus Wealth on my live show. One not to miss!
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is our weekly market update where we start in the US, cross to Europe and Asia and end in Australia, covering commodities and crypto along the way.
When UK Prime Minister Harold Macmillan was asked what was the greatest challenge for a statesman, he replied: ‘events, dear boy, events’.
This is highly relevant to this week’s market review, because they were whipsawed through the trading day asking what is a negotiating gambit and what is a serious policy proposal. After opening higher, they sank mid-session during a public berating of Ukrainian President Zelensky by President Trump and Vice President Vance at the White House. Zelensky is “not ready for Peace if America is involved,” Trump said in a post on Truth Social afterwards.
But, US investors shook off the volatility through mid-afternoon and then pushed still higher leading into the closing bell so that all three US benchmarks rallied, with financials leading all 11 of the S&P 500 industry sectors higher. As a result, The S&P 500 climbed 1.59% The NASDAQ gained 1.63%, while the Dow Jones Industrial Average rose 1.39%. The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 7.10% to 19.63.
Across the week, the Dow was up 0.95%, the S&P 500 was down 0.98% and the NASDAQ was down 3.47%. Both NVIDIA and Tesla rallied to finish the week, rising 4 per cent and 3.9 per cent respectively, but were still down 7% and 13% for the week. Shares of NVIDIA which reported earnings late Wednesday, swung to losses as investors focused on signs of increased AI spending in the industry.
The MSCI global index was up 0.66% on Friday, but still down 1.33% for the week, while the STOXX 600 European index was up another 0.6% across the week after touching a record high on Wednesday. Australia’s ASX 200 rounded off earnings season on a negative note, slipping 1.2 per cent, to post its second consecutive month of losses, tumbling 4.2 per cent in February wiping out all gains this year.
The level of uncertainly across markets is reaching fever pitch, and we can expect to see more volatility as the world order is shifting under our feet. On Tuesday I will be discussing the implications for investors with Damien Klassen from Nucleus Wealth on my live show. One not to miss!
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
The less meaningful monthly CPI was released today by the ABS. The headline was that the reported annual CPI was unchanged, while the underlying rose just a tad. But remember this monthly series is only partial, being goods heavy while the services sector is the problem child at the moment, which is why the RBA prefers to look at the quarterly numbers, which are a couple of months away.
Annual trimmed mean inflation excluding volatile items and holiday travel was 2.8 per cent in January, up slightly from 2.7 per cent in December.
Nothing here to move the dial.
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is our weekly market update, where we start in the US, cross to Europe and Asia and end in Australia, covering commodities and crypto on the way. This is a data rich tour as stocks finished lower on Wall Street but edged higher in Europe on Friday amid uncertainty about U.S. President Donald Trump’s rapid policy initiatives, including spending cuts and tariffs, and Germany’s upcoming elections. Oil prices settled down more than 2% while gold eased from record highs.
The Global MSCI index was down 1.04% on Friday, but MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 1.35% to its highest since November 8 and gained 1.47% for the week. The S&P 500 shed 1.7 per cent at the closing bell. The NASDAQ Composite slumped 2.2 per cent. The Dow Jones tumbled 1.7 per cent as twenty-three of the Dow’s 30 components fell, paced by United Health, Nvidia and Amazon. Crypto stocks sank after Bybit reported a hack with estimated losses of $US1.5 billion. Coinbase fell 8.3 per cent and Robinhood fell 8 per cent. The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was up 16.28% to 18.21.
The S&P/ASX 200 fell 0.3 per cent, and retreated 3 per cent since it closed at a record high last Friday. However, In Europe, shares have been volatile this week ahead of Germany’s election on Sunday, while talks between the U.S. and Russia on ending the war in Ukraine helped underpin a surge in European shares to record highs earlier in the week. Europe’s broad STOXX 600 climbed 0.52%, reversing two days of declines. It ended the week up 0.26% and the Hang Seng in Hong Kong lifted 3.99% on Friday. Investors piled into emerging market countries’ debt to the tune of $45 billion and bought up $2 billion of Chinese stocks in January, a closely followed report from the Institute of International Finance showed on Tuesday.
We could well be in the midst of a rotation to European and Emerging Markets and away from the over-valued US market, but given the sky-high level of uncertainty now exposed for all to see, we should expect more volatility, and we do risk dropping into correction territory in coming weeks.
Investors, as opposed to Traders might want to take risk off the table as the waves break over the assumptions many have about how the world works. As I will discuss on my upcoming Tuesday Live show, we are entering an era of global disorder, where powerful but transactional players try to rule the roost. And in so doing things will get broken, and markets disrupted, big-time.
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is our weekly market update, where we start in the US, cross to Europe and Asia and end in Australia, covering commodities and crypto on the way. This is a data rich tour as stocks finished lower on Wall Street but edged higher in Europe on Friday amid uncertainty about U.S. President Donald Trump’s rapid policy initiatives, including spending cuts and tariffs, and Germany’s upcoming elections. Oil prices settled down more than 2% while gold eased from record highs.
The Global MSCI index was down 1.04% on Friday, but MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 1.35% to its highest since November 8 and gained 1.47% for the week. The S&P 500 shed 1.7 per cent at the closing bell. The NASDAQ Composite slumped 2.2 per cent. The Dow Jones tumbled 1.7 per cent as twenty-three of the Dow’s 30 components fell, paced by United Health, Nvidia and Amazon. Crypto stocks sank after Bybit reported a hack with estimated losses of $US1.5 billion. Coinbase fell 8.3 per cent and Robinhood fell 8 per cent. The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was up 16.28% to 18.21.
The S&P/ASX 200 fell 0.3 per cent, and retreated 3 per cent since it closed at a record high last Friday. However, In Europe, shares have been volatile this week ahead of Germany’s election on Sunday, while talks between the U.S. and Russia on ending the war in Ukraine helped underpin a surge in European shares to record highs earlier in the week. Europe’s broad STOXX 600 climbed 0.52%, reversing two days of declines. It ended the week up 0.26% and the Hang Seng in Hong Kong lifted 3.99% on Friday. Investors piled into emerging market countries’ debt to the tune of $45 billion and bought up $2 billion of Chinese stocks in January, a closely followed report from the Institute of International Finance showed on Tuesday.
We could well be in the midst of a rotation to European and Emerging Markets and away from the over-valued US market, but given the sky-high level of uncertainty now exposed for all to see, we should expect more volatility, and we do risk dropping into correction territory in coming weeks.
Investors, as opposed to Traders might want to take risk off the table as the waves break over the assumptions many have about how the world works. As I will discuss on my upcoming Tuesday Live show, we are entering an era of global disorder, where powerful but transactional players try to rule the roost. And in so doing things will get broken, and markets disrupted, big-time.
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
Would you prefer to be living in New Zealand or Australia? The New Zealand story on monetary policy and home prices is a million miles away from the RBA’s approach of keeping rates lower, to protect jobs even if inflation remains above target.
Across the ditch the Reserve Bank’s approach of “no regrets”, took interest rates much higher, lifted unemployment and pulled home prices lower, and because of the more aggressive action appears to have left the land of the long white cloud better placed in the months ahead.
The New Zealand Monetary Policy Committee this week agreed to lower the Official Cash Rate by 50 basis points to 3.75 percent.
The RBNZ have been cutting for a while and and house prices haven’t been rising. The 40% run up in prices over the pandemic has been followed by the sharpest price crash in generations. Even so, price-to-income ratios remain elevated relative to historical experience, especially given the current interest rate settings. Whilst median home price to median household disposable income are coming down, we are still around 10 times in Auckland, and over 8 times nationally.
So standing back, the different path between the Central Banks of Australia and New Zealand really stand out. Which begs the question, is a shorter sharper shock, or a slow grind with no clear way out the better path? And should stronger controls on mortgage lending be imposed to keep home prices under control? Oh, yes and the elephant in the room, should migration be dialled back – as in New Zealand, where Stats NZ reported that 72,000 citizens left the country while just 24,900 arrived, and the overall net loss of citizens in 2024 is the largest in a calendar year – or should migration still be pushed hard, despite the rhetoric as in Australia? Frankly to me on so many fronts New Zealand seems in better if imperfect hands than Australia!
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
Kiwis Get Another Mega Rate Cut, As Inflation Sits In Band!
Would you prefer to be living in New Zealand or Australia? The New Zealand story on monetary policy and home prices is a million miles away from the RBA’s approach of keeping rates lower, to protect jobs even if inflation remains above target.
Across the ditch the Reserve Bank’s approach of “no regrets”, took interest rates much higher, lifted unemployment and pulled home prices lower, and because of the more aggressive action appears to have left the land of the long white cloud better placed in the months ahead.
The New Zealand Monetary Policy Committee this week agreed to lower the Official Cash Rate by 50 basis points to 3.75 percent.
The RBNZ have been cutting for a while and and house prices haven’t been rising. The 40% run up in prices over the pandemic has been followed by the sharpest price crash in generations. Even so, price-to-income ratios remain elevated relative to historical experience, especially given the current interest rate settings. Whilst median home price to median household disposable income are coming down, we are still around 10 times in Auckland, and over 8 times nationally.
So standing back, the different path between the Central Banks of Australia and New Zealand really stand out. Which begs the question, is a shorter sharper shock, or a slow grind with no clear way out the better path? And should stronger controls on mortgage lending be imposed to keep home prices under control? Oh, yes and the elephant in the room, should migration be dialled back – as in New Zealand, where Stats NZ reported that 72,000 citizens left the country while just 24,900 arrived, and the overall net loss of citizens in 2024 is the largest in a calendar year – or should migration still be pushed hard, despite the rhetoric as in Australia? Frankly to me on so many fronts New Zealand seems in better if imperfect hands than Australia!
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
The RBA adjusted down their expectation of the level of unemployment across Australia to 4.2% this week, a level which they expect to remain unchanged for at least two years. Then today we got the latest from the ABS on this frankly fuzzy series of data which showed that the seasonally adjusted unemployment rate rose by 0.1 percentage point to 4.1 per cent in January. 44,000 people found work last month while the number of unemployed increasing by 23,000 people. In short, the jobs market remained “incredibly strong”. That said, some of the increase in unemployment reflected more people than usual with jobs in January who were waiting to start or return to work.
Indeed, the ABS hinted the rise in the unemployment rate in January could reverse in February, saying there were more people than usual with jobs who were waiting to start work last month, but who were technically counted as unemployed.
The employment picture is more complex than might first appear. Given the still high migration levels into Australia, there are more people looking for work, and this is putting the squeeze on some older, perhaps more experienced and therefore expensive locals.
Second, the continued growth of the non-market sector, funded by Governments at federal and state levels means a continued expansion of jobs in specific sectors, like the care sector, but which are not necessarily improving the poor levels of productivity in the economy.
Third as the ABS hints at, the numbers are a bit wobbly given changes to seasonal factors, and also the swapping the sample groups.as well as their strict definition of who is classed as unemployment. Roy Morgan’s alternative method gives a different picture.
Finally, the significant gap between Victoria with unemployment rates of around 4.7%, and other states, suggests that state policy is also important, and on that measure, Victoria is failing again.
Bottom line, overall the jobs market will continue to hold the RBA back from cutting rates again, even if under the hood things are far from rosy. To that extent, words and figures do differ.
http://www.martinnorth.com/
Digital Finance Analytics (DFA) Blog
Australian Jobs Up, Unemployment Up, But What’s Under The Hood?
