Discover and read the best of Twitter Threads about #rba
Most recents (18)
The #RBA raised rates to 4.1%, (in a move not expected by market economist median) "to provide greater confidence that inflation will return to target within a reasonable timeframe.". The final paragraph is unchanged noting further tightening "may be required". 
The RBA sees upside risks to the inflation outlook and decided to act. While economic activity is clearly slowing there hasn't been convincing evidence as yet, in the Australian context, that inflation is on a sustainable downward trajectory
#RBA notes the award wage decision. It notes that wages growth it expects is consistent with the inflation target "provided that productivity growth picks up". Productivity that it hopes will pick up as businesses come under pressure, policymakers have done little to ensure this
Australian retail sales for Feb comes in right on market expectations at 0.2%mom, coming after a rebound in January. Signs of retail slowdown are evident but not a red flag for the #RBA to pause next week
In level terms retail sales remain well above where the pre-pandemic trend suggests they should be
Per capita retail sales values are still at pretty astonishing levels, the downside risk to this is clear given the impacts of rising interest rates on discretionary spend in particular
1/ $AUD ALERT
The RBA today raised expectations it may follow the BoC & pause hikes soon despite inflation still high (but falling).
With the rate spread between AU & US one of the key determinants of the AUD & the #Fed expected to hike 3 more times, this is material...
#macro
The RBA today raised expectations it may follow the BoC & pause hikes soon despite inflation still high (but falling).
With the rate spread between AU & US one of the key determinants of the AUD & the #Fed expected to hike 3 more times, this is material...
#macro
2/ On the back of this, we have flowed through a scenario of an AU rate pause to the HQ AUD model, with US rates still rising to 5.3%
This scenario, if it eventuates, knocks >3c off the HQ fair value target for the AUD (Dec 23) to $0.6314 vs FV $0.6680 prior to today...
This scenario, if it eventuates, knocks >3c off the HQ fair value target for the AUD (Dec 23) to $0.6314 vs FV $0.6680 prior to today...
Look, the tabloid responses are easy. And no-one likes the pain caused by rate rises. But here's the thing:
1. Inflation, left to spiral, will destroy our standard of living.
2. Higher rates, temporarily, beat higher prices, permanently
3. Of course it's painful.
1/n
1. Inflation, left to spiral, will destroy our standard of living.
2. Higher rates, temporarily, beat higher prices, permanently
3. Of course it's painful.
1/n
4. It's also unfair that the burden falls where it does
5. The RBA has few other options: either high inflation or high rates
6. The choice is easy (see 1. and 2. above)
2/n
5. The RBA has few other options: either high inflation or high rates
6. The choice is easy (see 1. and 2. above)
2/n
7. 'Avoiding pain' for households is a seductive idea, but it's a non-starter -- the pain is either higher prices or higher rates. There's no Door #3.
8. Parliaments can do more. They should do more. But in the meantime, the RBA has no other options.
3/n
8. Parliaments can do more. They should do more. But in the meantime, the RBA has no other options.
3/n
The #RBA raises interest rates by 25bp as broadly expected with more to come. The Bank noting "increases in interest rates will be needed over the months ahead", pencil in another 25bp hike for March unless the data capitulates before then
A hawkish tone around inflation from the #RBA seemingly coming around to the idea that the narrow path it seeks to tread is becoming more so, interestingly it didn't change its central growth forecasts
Headline inflation forecasts no different either with a return to the top of the band in mid-2025, such elevated inflation rules out any rate cuts this year. No mention of the new underlying forecast even though that was the forecast miss in the data, a curious omission
The #Fed #pivot talk has intensified lately.
Sth possibly breaking in the #UK, European financial system ( $CS, $DB...), #RBA pivoting by hiking less than expected, higher financial risk in the #US...
Should the #Fed #pivot and why?
Let's demystify all this.
A thread.
1/25
Sth possibly breaking in the #UK, European financial system ( $CS, $DB...), #RBA pivoting by hiking less than expected, higher financial risk in the #US...
Should the #Fed #pivot and why?
Let's demystify all this.
A thread.
1/25
The rates conversation is - should be - complex.
Some thoughts, in an interest rate 🧵
#ausbiz #rates #RBA
1/n
Some thoughts, in an interest rate 🧵
#ausbiz #rates #RBA
1/n
There's a decent 'chart crime' - or at least a meaningful misdemeanour - on the AFR's homepage this morning:
2/n
2/n
It's rectified in the article:
BUT... that's not even close to the full picture:
(source: afr.com/policy/economy…)
3/n
BUT... that's not even close to the full picture:
(source: afr.com/policy/economy…)
3/n
Hello February! 🐰🐰
Biggest mistake of January?
Selling most of my $CRB +9.79% exposure
No 👀 back and 😭 over spilled 🥛
Time to grab the 🐯 by the #tail and dig into the 🧮!
Biggest mistake of January?
Selling most of my $CRB +9.79% exposure
No 👀 back and 😭 over spilled 🥛
Time to grab the 🐯 by the #tail and dig into the 🧮!
Most of Asia celebrating 🐯
Good idea given January returns with $KOSPI -10.56%, $SSEC -7.65, and $NIKK -6.22%
Tuesday trading
$NIKK 27078 +0.3%
$BSE 58871 +0.8%
Good idea given January returns with $KOSPI -10.56%, $SSEC -7.65, and $NIKK -6.22%
Tuesday trading
$NIKK 27078 +0.3%
$BSE 58871 +0.8%
January returns for Euro area were ↘️ but better than USA and Asia
January: $DAX -2.6% and $CAC -2.15%
Early trade
$DAX 15599 +0.8%
$FTSE 7533 +0.9%
$CAC 7065 +0.95%
$AEX 762 +0.9%
$IBEX 8706 +1.1%
$MIB 27091 +1.05%
$SMI 12327 +0.8%
$MOEX 3561 +0.9% 🪆
January: $DAX -2.6% and $CAC -2.15%
Early trade
$DAX 15599 +0.8%
$FTSE 7533 +0.9%
$CAC 7065 +0.95%
$AEX 762 +0.9%
$IBEX 8706 +1.1%
$MIB 27091 +1.05%
$SMI 12327 +0.8%
$MOEX 3561 +0.9% 🪆
Rabobank 1/9: #CFTC Commitment of Traders Report
Speculators’ net #USD positions held in positive territory for the 4th consecutive week, though overall size dropped moderately along with the softer tone of the greenback in the spot market. Previous to this the market had not had
Speculators’ net #USD positions held in positive territory for the 4th consecutive week, though overall size dropped moderately along with the softer tone of the greenback in the spot market. Previous to this the market had not had
Rabobank 2/9: a run of net long positions since June 2020. The USD has been one of the best performing G10 currencies this year reflecting reflation optimism and a shift in expectations regarding Fed rates policy.
#EUR net longs dropped to their lowest level since March 2020.
#EUR net longs dropped to their lowest level since March 2020.
Rabobank 3/9: Concerns about the speed of the vaccine roll-out programme in #Eurozone have been constraining expectations regarding the economic recovery in the region as fears about a third wave spread. ECB has brought forward bond purchases to push down the level of bond yields
DBS Private Bank 1/12: #AUDUSD: Upside pressure persists on bullish flag pattern
Chart 1 (weekly chart) shows without a moving average convergence divergence negative decline, #AUD merely pushed lower to 0.7564 but clung tightly to a major trendline support that connects from
Chart 1 (weekly chart) shows without a moving average convergence divergence negative decline, #AUD merely pushed lower to 0.7564 but clung tightly to a major trendline support that connects from
DBS Bank 2/12: the major 0.5510 lows through last November’s 0.6991 lows. A bullish flag is being formed, which implies AUD retains its underlying bullish tone.
Chart 2 takes a look at #AUD’s supporting cast. China’s iron ore inventory (in red), together with iron ore prices
Chart 2 takes a look at #AUD’s supporting cast. China’s iron ore inventory (in red), together with iron ore prices
DBS Bank 3/12: (in green; SGX TSI Iron Ore CFR China Index prices), remain in good stead with coal prices (in blue; Newcastle coal prices). #AUD is holding up well as its terms of trade remain buoyant as Australia’s trade squabble has not seen China inhibit iron ore & LNG imports
Citibank 1/5: #AUD: Where does #RBA go in 2021 and beyond? - the RBA Governor concedes that it will take years before it achieves its inflation and employment goals. Despite the meaningful upgrade to the activity outlook, underlying inflation—at 1.25% in 2021 and 1.5% in 2022—
Citibank 2/5: is expected to remain below the Bank’s 2%-3% tget through the forecast horizon. Moreover, there’s still excess spare capacity in labor market; the unemployment rate forecast of 5.25% by the end of next year is still above Bank’s NAIRU (natural rate of unemployment)
Citibank 3/5: estimate of 4.5%. RBA’s balance sheet is set to expand further...the total size of the RBA’s balance sheet is set to increase from its current level of $AU330bn to around AU$600bn by November, or close to 30% of nominal GDP
Rabobank 1/8: #CFTC #CommitmentofTraders Report:
Net #USD short positions were little changed last week though a modest increase was recorded. Net shorts remain near recent highs and are therefore not reflecting this year’s improved performance of the USD in the spot market.
Net #USD short positions were little changed last week though a modest increase was recorded. Net shorts remain near recent highs and are therefore not reflecting this year’s improved performance of the USD in the spot market.
Rabobank 2/8: Focus is on the size of the Biden fiscal giveaway and the relative success of vaccine roll-out programmes. Rising inflation expectations appear out of kilter with the Fed’s very cautious tone.
#EUR net longs dropped back sharply. In spot market it appears that
#EUR net longs dropped back sharply. In spot market it appears that
Rabobank 3/8: the EUR is being undermined by the slow vaccine roll-out programme in the EU. This is supporting talk that the region could fall behind in the reflation trade.
Net #GBP long positions edged higher but remain below recent highs.
Net #GBP long positions edged higher but remain below recent highs.
Rural Funds $RFF $RFF.AX is a Best In Class agricultural #REIT when compared with global peers. 👩🌾🧑🌾Strong dividends, strong growth in farmland and water valuations, and backed by real assets as a hedge against inflation. Worried about #QE or #MMT? Time for a deep dive, hay! 👇
1. Macro: Global food demand needs to increase by 71% before 2050 to keep up with population growth and increasing wealth / caloric consumption. Land is scarce, deteriorating (e.g soil loss), and #climatechange is reducing food production particularly in marginal areas.
2. Macro: Food security is a heavily politicised area, because food insecurity leads to political insecurity. Significant subsidies, regulations, and red tape barriers often drive up asset values to increase investments. Think of it as a security blanket on your investment..
THREAD on #FWC minimum wage decision today. The FWC froze wages for 75% of award-dependent workers: 40% for 4 months (to Nov. 1), and 35% for 7 months (to Feb. 1). The other 25% of workers will get a wage increase on the normal date (July 1), but a small one (1.75%)...2
On a weighted-average basis (weighting for shares of workforce and portion of the year covered), this works out to a 1.16% increase in the average minimum wage for the 2020-21 financial year. That's the smallest since the full 1-year freeze in 2009 (following the GFC)...3
This decision will tilt the macroeconomic balance even further toward deflation: a major risk in a crisis such as now. The wage is the most important price in the economy: it anchors other nominal levels. The #RBA agrees inflation will likely turn negative in coming months...4
Thus far, Treasury & RBA have shown a lack of imagination, the small scale of their actions indicating they didn't grasp the size of the crisis & were behind the game even as they announced their first steps. They've realised their mistake...
thenewdaily.com.au/finance/financ… ...but the
thenewdaily.com.au/finance/financ… ...but the
big question now is how far they are prepared to go tomorrow to correct it.
Do they have both the imagination and nerve to make the big leap to instill a some confidence by getting ahead?
Odds are RBA will be predictable and mimsy - 25 points and QE bond buying. That's not...
Do they have both the imagination and nerve to make the big leap to instill a some confidence by getting ahead?
Odds are RBA will be predictable and mimsy - 25 points and QE bond buying. That's not...
getting ahead by any means. It's housekeeping. Linked to in today's piece above is this September story thenewdaily.com.au/finance/financ… about the prescient report by prominent former central bankers about the challenge of the next crisis - this crisis - when...
The #RBA has cut interest rates to a new record low of 0.5 per cent to counter the hit to the #economy caused by the #coronavirus. #abc730 @carringtonAU
@carringtonAU “It's not going to do anything for universities, Chinese restaurants, travel agents, supply chains that have been blocked from China and so on. The interest rate is not really the right sort of instrument to this sort of problem.” - Fmr RBA board member Bob Gregory #abc730 #rates
@carringtonAU Brad Stephens and Kate Halton say the rate cut doesn’t mean they will spend more. “We would be much more inclined to probably just tip that back into the mortgage and just bring our principal down a bit more.” – Brad Stephens. #abc730 #rates
<#LawyersResist #RBA⚖ Thread>
Many of us are very concerned 45 is about to try to fire Mueller. I'll lay out our concerns & how to help. ⤵
Many of us are very concerned 45 is about to try to fire Mueller. I'll lay out our concerns & how to help. ⤵
I want to dig a little deeper on WHO can/would fire Mueller. Probably not # 1 or 2, per @benjaminwittes
politico.com/story/2017/06/…
politico.com/story/2017/06/…
<#LawyersResist #RBA⚖️Thread>
Many concerned about recent EO amending #EO13223 on IRR. I want to explain why we shouldn't be too concerned.
Many concerned about recent EO amending #EO13223 on IRR. I want to explain why we shouldn't be too concerned.
IRR—Individual Ready Reserve—is classification given to former military. IRR callups=backdoor drafts of those who've already served. Scary.
Helpful to read the original #EO13223 and the amendment side by side. To my eyes, very little substantive difference
presidency.ucsb.edu/ws/?pid=61504
presidency.ucsb.edu/ws/?pid=61504
