Australian Quarterly Update
The market continues to price two rate cuts in Australia over the next twelve months as the RBA grapples with sluggish consumption and subdued inflation. This was evident in first quarter inflation data released last week. This quarter’s update was written before the release and in light of the softer picture, we have brought forward our RBA cuts from August and November to May and August. This is in spite of the current resilience of the labour market. In the April update we take a longer term look at the structural forces at work in the Australian economy and why rates will remain low into the next decade. Also in this update, we examine what has contributed to the recent strength in domestic credit, how we have positioned our credit funds and what dangers remain lurking on the horizon. In cash markets, very front-end rates recently fell to their lowest on record – our Cash PM, Steve Campbell explains why and what lies ahead. Finally, the quarter also featured International Women’s Day, which we thought would be opportune to educate investors on gender equality bonds, a growing segment of Responsible Investment.
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