The state of the economy at the street level

[divs4ever]

Of course should have used the term 10 year "yields".

Bonds in fact are trending down.

yes , one of those anomalies in finance reporting

 

[Chipp]

yes , one of those anomalies in finance reporting

Bond yields and bond futures are easily mixed up , of course they move inversely

 

[divs4ever]

Bond yields and bond futures are easily mixed up , of course they move inversely

that confusion ( by others ) worked very nicely for me between 2011 and 2016

 

[TimeISmoney]

RBA to lift cash rate to 5.1pc, says top forecaster​

RBA to lift cash rate to 5.1pc, says top forecaster

Judo Bank’s Warren Hogan, who was ranked 2023’s most accurate forecaster, predicts a resurgent economy will force the RBA to lift rates to 5.1 per cent.

www.afr.com

There is data trending in the right direction to semi support this view although IB futures are as dynamic and mean reverting as anything out there , atm we are seeing just a hint of a hike starting to be priced with the terminal rate now above the present cash rate for the first time in many months . The chart posted here is the projected terminal rate change in Sept as priced by IB futurtes , this chart is a little delayed with current pricing at +3 bps terminal rate in sept compared to the -50bps of cuts priced 2 months ago . Dec '24 getting closer to a full rate hike priced .

View attachment 175605 View attachment 175604

I said it at the beginning of the year that there's little chance you'll see a rate cut in Australia until next year sometime because a lot of it is forced inflation, How can prices go down when you have commodities and labour so high, and most companies have had years of good growth?

 

[sptrawler]

Not a good sign for made in Australia, the 1980's globalisation unintended consequencies finally manifesting and making the West look impotent.
At least when Trump was in the Chinese were agreeing to discuss reciprical trade balance, now it looks like the U.S could be in the manure.

https://www.reuters.com/world/china/china-passes-tariff-law-tensions-with-trading-partners-simmer-2024-04-26/

 

[divs4ever]

Not a good sign for made in Australia, the 1980's globalisation unintended consequencies finally manifesting and making the West look impotent.
At least when Trump was in the Chinese were agreeing to discuss reciprical trade balance, now it looks like the U.S could be in the manure.

https://www.reuters.com/world/china/china-passes-tariff-law-tensions-with-trading-partners-simmer-2024-04-26/

and Sam Walton ( of Walmart fame ) did much to help us arrive at this destination

and the interesting lesson will be .. has China cultivated enough new markets ( customers ) to navigate this ( imagine more Africans owning EVs than Europeans and living in electricity independent homes )

 

[wayneL]

We're all feeling it.

 

[Smurf1976]

Not a good sign for made in Australia, the 1980's globalisation unintended consequencies finally manifesting and making the West look impotent.
At least when Trump was in the Chinese were agreeing to discuss reciprical trade balance, now it looks like the U.S could be in the manure.

Bottom line is 2008 with the financial crisis marked a turning point with globalisation. Not the end, but a turning point which ended the trend up to that point.

As with any major shift, it takes a while for the effects to become obvious but we're starting to see it now.

 

[JohnDe]

I’m seeing signs of change today. Getting my car hand washed at my usual, which is usually very busy on a Saturday morning, today they look at best 50% capacity. While across the road the auto wash site with 2 machine was bays and 4 self wash bays has cars lined up to the street.

People counting their pennies?

 

[moXJO]

Restaurants are packed as are adventure type outings.

 

[TimeISmoney]

That's an interesting result.

​

RBA has gone too far and nervous nellies should admit it as interest rises don't impact these crushing costs​

 

[wayneL]

I started with a new client yesterday who has worked at a debt collector for over 30 years. I asked her about what she thought about the economy.

Reckons she is starting to see signs in her work load similar to the 80s "recession we had to have".

That said, we both agreed there are mixed messages ATM.

 

[TimeISmoney]

Reckons she is starting to see signs in her work load similar to the 80s "recession we had to have".

Something has to happen when fuel prices have hit all-time highs in some capital cities.

 

[farmerge]

Restaurants are packed as are adventure type outings.

Local food hall and takeaway joints here always seem to be doing pretty well.
No shortage of money if you have it.
It's the ones who are on Struggle Street that are not seen in these establishments.

 

[moXJO]

That said, we both agreed there are mixed messages ATM.

This is definitely the take. Certain industries are in a weird zone. There's an ever gradual slide downwards as people stop spending on certain items or services. Hard to see where the bottom is as the drift down is fairly slow.

 

[mullokintyre]

​

Australian retail sales weaker than expected​

DAVID ROGERS
Australian retail sales are weaker than expected for March, falling 0.4 per cent versus the 0.2 per cent that was expected.
The previous monthly change is revised down to 0.2 per cent from 0.3 per cent initially recorded.
The data may easing interest rate jitters before the RBA meeting next week.
But they may also see some stagflation concerns emerging as inflation remains stubbornly high.
The data may ease interest rate jitters before the Reserve Bank meeting next week. But they may see some stagflation concerns emerge as inflation remains sticky.

Theres that word again.
And like in the US, previous months revised down.

Mick

 

[moXJO]

I'm seeing a trend on the socials for the population to force a recession by not spending on goods. Apparently "a short recession now is better than a longer one later.
So gear up for discounts or bankruptcy auctions. Usually these times are good for larger equipment purchases.

 

[mullokintyre]

Australian yearly retail sales is now the lowest on recod excluding the Covid crunch and the slowdown post introduction of GST.
Mick

 

[sptrawler]

This is definitely the take. Certain industries are in a weird zone. There's an ever gradual slide downwards as people stop spending on certain items or services. Hard to see where the bottom is as the drift down is fairly slow.

The slow drift down IMO is because of the money injections, through direct subsisdies, wage increases and next the tax changes, from memory in the past this hasn't been tried, it will be interesting to see the end result.
Will people manage to survive by pedling faster and a new norm arrives where high prices are sustainable, it may mean that people just have to get used to working harder, in a lot of countries that is the norm.

 

[Chipp]

No-one should be surprised retail decline