Inflation

[3 hound]

SQQQ for meeeee

What this means??

 

[waterbottle]

.

What this means??

It's an ETF that shorts nasdaq.

Meanwhile, RBNZ hiked 50bps yesterday with no indication that they will stop anytime soon. Their rate is already at 2.5%....
Bank of Canada came in with a shock 100bps, also at 2.5%.

RBA is lagging...

 

[3 hound]

Geez, wonder if the smart people will start using the "R" word to describe the economy.

.

It's an ETF that shorts nasdaq.

Meanwhile, RBNZ hiked 50bps yesterday with no indication that they will stop anytime soon. Their rate is already at 2.5%....
Bank of Canada came in with a shock 100bps, also at 2.5%.

RBA is lagging.

 

[qldfrog]

SQQQ for meeeee

Nasdaq hardly down....
Do not take me wrong....i used to thought like you,but the last few years is making me giving up on any logical economic behaviour of the market.

So let's try to create a
New this is different this time approach:
Rate if they go up will crash rhe economy.
Market has anticipated the rate increase, if rates increase past the next rise, recession will be full blown,feds will release the screw with another form of QE to ensure their mates will benefit and DXF will reverse with usd falling, commodities will then rise and cash will be trash again so market will rise in a world with fiat collapse and unrestricted inflation.
Let's buy shares now to be in early...
There is so much anticipation/wild guess in the market that shares will soon boom in depression and collapse in boom time..

 

[waterbottle]

Nasdaq hardly down....
Do not take me wrong....i used to thought like you,but the last few years is making me giving up on any logical economic behaviour of the market.

So let's try to create a
New this is different this time approach:
Rate if they go up will crash rhe economy.
Market has anticipated the rate increase, if rates increase past the next rise, recession will be full blown,feds will release the screw with another form of QE to ensure their mates will benefit and DXF will reverse with usd falling, commodities will then rise and cash will be trash again so market will rise in a world with fiat collapse and unrestricted inflation.
Let's buy shares now to be in early...
There is so much anticipation/wild guess in the market that shares will soon boom in depression and collapse in boom time..

I agree with you but that's the nature of trading and accepting risk.

I don't think markets have actually priced in a recession. That's evidenced by the fact we've had fresh lows each time Fed has raised rates - which by the way they've increased to 'unexpected levels' on each occasion. So the notion that the market has 'priced in' these changes is wrong.

The market also doesn't know what upcoming earnings are going to be like. Discretionary spending has only started to fall. Car loan failures are increasing in the US. Consumer habits have only changed in the past few months, which haven't yet been captured by Q1 earnings.

And finally, the market doesn't react immediately, even if it were to play out as you describe. I agree that rates will have to decrease at some point. But that isn't going to happen next week. It's less likely to occur at the next meeting. It's more likely to happen next year.

 

[qldfrog]

I agree with you but that's the nature of trading and accepting risk.

I don't think markets have actually priced in a recession. That's evidenced by the fact we've had fresh lows each time Fed has raised rates - which by the way they've increased to 'unexpected levels' on each occasion. So the notion that the market has 'priced in' these changes is wrong.

The market also doesn't know what upcoming earnings are going to be like. Discretionary spending has only started to fall. Car loan failures are increasing in the US. Consumer habits have only changed in the past few months, which haven't yet been captured by Q1 earnings.

And finally, the market doesn't react immediately, even if it were to play out as you describe. I agree that rates will have to decrease at some point. But that isn't going to happen next week. It's less likely to occur at the next meeting. It's more likely to happen next year.

I was also trying to put a bit of smile in this view of market anticipation.
**** has been brewing for a while, to no surprise, inflation has now reached double digit, and high ones if we stick to same measurement methodology as the 70's yet my early move out of cash to PM got smashed..
Only my contrarian move to USD was good but will i be successful in getting out in time?
The backslash/fiat collapse could be VERY fast and dramatic after a Cyprus like episode, or a black swan
yet human nature is slow in changing habits so not a given and this could go on for years..Gosh this could have been sorted 15y ago with the GFC.
I thought at the GFC time, great, my son will be out of uni in 2020s..perfect for him to catch a rebound...well did not happen and he is starting is work life in an unpleasant time...not to even think conscription potential... ;-)

 

[divs4ever]

Geez, wonder if the smart people will start using the "R" word to describe the economy.

it will happen sometime after the 'D' word would be more appropriate

 

[waterbottle]

I was also trying to put a bit of smile in this view of market anticipation.
**** has been brewing for a while, to no surprise, inflation has now reached double digit, and high ones if we stick to same measurement methodology as the 70's yet my early move out of cash to PM got smashed..
Only my contrarian move to USD was good but will i be successful in getting out in time?
The backslash/fiat collapse could be VERY fast and dramatic after a Cyprus like episode, or a black swan
yet human nature is slow in changing habits so not a given and this could go on for years..Gosh this could have been sorted 15y ago with the GFC.
I thought at the GFC time, great, my son will be out of uni in 2020s..perfect for him to catch a rebound...well did not happen and he is starting is work life in an unpleasant time...not to even think conscription potential... ;-)

I wouldn't get too depressed about the work environment your son faces - youth are adaptable and its in the interests of the 'powers that be' to keep the system going.

Ive moved my cash to the USD only because RBA has been dragging its heels with IR rises and JPowell seems more aggressive compared to PLowe...

 

[mullokintyre]

The latest employment figures out suggest that there is still plenty of steam in the OZ economy.
FromABC News

Australia's official unemployment rate has dropped to 3.5 per cent, with an estimated 88,400 jobs added to the economy last month.

Key points:​

• The unemployment rate has fallen from 3.9 to 3.5 per cent
• This is the lowest official jobless rate recorded since August 1974
• Job vacancies remain high, with almost one available position for every officially unemployed person

This is a steep fall from the 3.9 per cent unemployment rate seen for the previous three months, and sets a fresh record low jobless rate since the Australian Bureau of Statistics (ABS) jobs numbers became monthly in 1978.

"This is the lowest unemployment rate since August 1974, when it was 2.7 per cent and the survey was quarterly," ABS head of labour statistics Bjorn Jarvis said.

"The 3.4 per cent unemployment rate for women was the lowest since February 1974 and the 3.6 per cent rate for men was the lowest since May 1976."

In further positive news for the economy, the fall in unemployment occurred despite another increase in the number of people looking for work, with the participation rate rising to a record high of 66.8 per cent.

Even with more jobseekers, there were almost as many vacant positions (480,000 in May) as people still looking for work (494,000 in June).

"This equates to around one unemployed person per vacant job, compared with three times as many people before the start of the pandemic," Mr Jarvis added.
The only clear negatives in the data were a slight rise in underemployment — from a post-global financial crisis low of 5.7 per cent to 6.1 per cent — and a very slight decrease in hours worked.

Mr Jarvis said the fall in hours worked was mainly due to the latest COVID-19 Omicron wave and a bigger-than-recent winter flu outbreak.

"There [were] around 780,000 people working fewer hours than usual due to illness in June 2022, almost double the usual number we see at the start of winter," he observed.

With pressure on employment it can only mean another rise in the interest rates next month.
The only question now is , what will the size if it be?
Mick

 

[JohnDe]

The latest employment figures out suggest that there is still plenty of steam in the OZ economy.
FromABC News

With pressure on employment it can only mean another rise in the interest rates next month.
The only question now is , what will the size if it be?
Mick

5 reasons for 75bp RBA hike in August: DB

Deutsche Bank Australia chief economist, Phil O'Donaghoe sees five reasons for the RBA to hike rates by an upsized 75bps in August.

First is the upside risk to 2Q CPI from soaring food and energy prices, which could see headline CPI above the RBA's 7 per cent forecast by year end.

In his view there's also a chance that core inflation is already annualizing at 7 per cent.

Second, global supply side inflation pressures are abating, but demand pressures are rising, and he doubts Australia will avoid this situation.

Third, Australia's reliance on quarterly data for prices risks changes in inflation psychology going unchecked. "Reliance on quarterly data in Australia negates the benefit of using a monthly meeting cycle to adjust policy rapidly, but not abruptly," he says.

Fourth, the sensitivity of Australian households to changes in interest rates is being overstated. "Proportionately, more mortgage debt is now on fixed rate contracts than in any previous hiking cycle during the RBA's inflation targeting era," he says.

Fifth, he says BoC Governor Tiff Macklem makes a good point.

"Just like Canada, inflation in Australia "is too high", "people are worried that (it) is here to stay" and the RBA "cannot let that happen"," Mr O'Donaghoe says.

"We continue to look for the cash rate to rise by 75bps in August, and for the cash rate to reach 3.1 per cent% by the end of the year." DAVID ROGERS

August rate hike a certainty

The nation's resilient labour market indicators mean the Reserve Bank will hike the official cash rate by at least 25 basis points at its next meeting on August 2, according to CBA economists.

"But we acknowledge that an even larger "jumbo" rate hike could be on the cards with the risk to the upcoming June quarter inflation print released on July 27 firmly tilted to the upside."

The official cash rate has risen to 1.35 per cent on consecutive monthly hikes since May.

"Such is the strength of the labour market, a record 13.6 million Aussies were employed at the end of June, CommSec's senior economist Ryan Felsman says in his note after ABS data showed the jobless rate hit a 48-year low of 3.5 per cent in June.

"Record high job vacancies, higher pay packets and rising cost of living pressures are encouraging more workers to look for a job or to increase their hours of work."

"Australia’s labour force participation rate hit an all-time high of 66.8 per cent last month. And despite elevated worker absenteeism due to influenza, rising Covid-19 cases and flooding on Australia’s East Coast, hours worked by Aussies fell less than 0.1 per cent in June."

He expects further tightening of the labour force over the next few months.

VALERINA CHANGARATHIL

 

[waterbottle]

The latest employment figures out suggest that there is still plenty of steam in the OZ economy.
FromABC News

With pressure on employment it can only mean another rise in the interest rates next month.
The only question now is , what will the size if it be?
Mick

Time to go harder.

Canada delivered a shock 100bps increase.
South Korea surprised with 50bps.
NZ delivered 50bps consistently and early, with the view to continue indefinitely until inflation controlled.
The Fed is now likely to deliver 75bps, possibly 100bps.

RBA will have to move faster before AUD keeps falling and we end up with imported inflation.

 

[waterbottle]

US PPI up 1.1%, higher than the 0.8% expected, for June...

 

[frugal.rock]

The Fed is now likely to deliver 75bps, possibly 100bps.

100bps by a nose so far at 52%,
75bps at 48%

US PPI up 1.1%, higher than the 0.8% expected, for June...

I reckon they will do the same as BoC, 100bps

 

[waterbottle]

100bps by a nose so far at 52%,
75bps at 48%



I reckon they will do the same as BoC, 100bps

Yup, market starting to think the same.
Oil getting dumped.
Iron ore getting dumped.
DXY increasing.

Market begins to price in recession

 

[over9k]

Yeah all the screeching about 75 when they were planning 50 worked so history suggests we'll get the higher rate this time too.

 

[over9k]

Lots of talk about trump finding his comeback moment now too. Something to keep an eye on.

 

[over9k]

Translation:

"We are f**ked".

 

[over9k]

 

[Knobby22]

Time to go harder.

Canada delivered a shock 100bps increase.
South Korea surprised with 50bps.
NZ delivered 50bps consistently and early, with the view to continue indefinitely until inflation controlled.
The Fed is now likely to deliver 75bps, possibly 100bps.

RBA will have to move faster before AUD keeps falling and we end up with imported inflation.

I am a bit shocked. Inflation I thought would be transitory but the video above is convincing.
It seems to me now that recession is inevitable but have lost confidence in my judgement on this.

 

[waterbottle]

I am a bit shocked. Inflation I thought would be transitory but the video above is convincing.
It seems to me now that recession is inevitable but have lost confidence in my judgement on this.

Transitory is loosely defined. It may have meant a matter of months or a matter of years.
The problem is that there have been a number of hiccups along the way that the federal reserve couldn't predict e.g war, continuous lockdown in China etc. That have contributed to inflation.