UNIT University Network for Investing and Trading UniMelb

Before The Bell 09/09/2019

By: Sam Triantafillopoulos


Macro:

With growth figures out last week, Australia’s FY2019 has been the worst since 2001, fuelling fears of a recession in 2020. The RBA has not signalled a cut on the horizon, with the two consecutive cuts earlier in the year now seeming early. This marks a shift in central bank orthodoxy from data-dependent to countercyclical, ultimately seeking to front-run markets rather than respond directly to the macro environment. Chairman Powell seemed to have adopted a similar stance, with both countries’ equity markets up more than 18% year to date. China continues to slow, with the PBOC signalling further loosening measures (or rather the removal of tightening measures). In turn, copper has seen a bear market much like that of 2016, in which an industrial recession gripped both China and the United States. Germany looks set for a recession in early 2020, with exports collapsing 20%. All 30 of the 30 largest economies have seen consecutive quarter on quarter falls in PMI figures, signalling weak production globally.

Equity:

Pro Medicus dominated the news cycle last week, its founders offloading shares, with the stock falling 12% on Friday. PME remains up more than 200% year to date.

Upcoming Economic Calendar:

10/09 Tue: CNY Consumer Price Index (YoY) (AUG); AUD NAB Business Confidence (AUG)

12/09 Thurs: EUR European Central Bank Rate Decision (SEP 12); EUR ECB Deposit Facility Rate (SEP 12); USD Consumer Price Index (YoY) (AUG); USD Consumer Price Index Ex Food and Energy (YoY) (AUG)

13/09 Fri: USD Retail Sales Advance (MoM) (AUG); USD U. of Mich. Sentiment (SEP P)


Sources: Australian Financial Review, Sydney Morning Herald, Investopedia, Bloomberg, MarketWatch, DailyFX

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