Income & Fixed Interest Newsletter – April 2018
Recent market events have shown the continuing knock-on effects of US monetary policy normalisation. The reduction in US Dollars available onshore in the US, but more importantly offshore, is currently claiming its next victims in emerging markets. This is after pushing US short term money market rates higher in March and will continue as US monetary policy normalises. Quantitative tightening is a big part of it but the likelihood of positive real Fed Funds rates also sees US cash making a comeback as an asset class. This unravelling story has impacts across rates, currency, credit and equity markets and I will dive back into these next month. This month given there’s so much going on I wanted to take an in-depth look at Australia.