Kit Lowe

All my RBA interest rate forecasts February 2020 to August 2023 . linkedin.com/pulse/rba-comm…

@PolemicTMM @Gerald_Ashley Drones R Us maybe?

@kit_lowe @Gerald_Ashley Wonder how far behind VW they are in turning their factories towards missile production.

Attn @Gerald_Ashley Ferrari turning into an Aston Martin.

RBA Dep Gov to speak twice before the next RBA meeting on May 4-5. Expect Gov Bullock may want to speak before then but still no scheduled speeches from other RBA board members which goes against both the content and spirit of the RBA review. #auspol $AUD

*RBA: HIGHER NEUTRAL RATE MAY NEED MORE RESTRICTIVE POLICY *RBA: SUPPLY SHOCK, FASTER INFLATION MAY PUSH UP NEUTRAL RATE #auspol

The oil tanker SFL Tucana is berthed in Sydney Harbour this morning. Looks like it entered ~ March 23 #auspol #OOTT

Worth a read.

@ericwallerstein Noted.

@kit_lowe global auctions is certainly useful context. though regarding 200bn... any fiscal issues would be more likely to show up in ASW (which they are) rather than 2y auction in an in-demand currency. the point is preventing UST bond sales from funding USD demand, which has precedent.

The Brent curve still sits in heavy backwardation and the whole curve sits higher than one month ago implying a longer turn rise in inflation. As Ben Emons from Fed Watch advisers points out the batch of global PMI data already indicates the potential for irreparable damage to the global economy. The S&P surveys said specifically that manufacturers signalled the steepest month-on-month rise in input price inflation since 1992.

Pre dates the surge in fuel prices in March. Just another month for headline and core CPI to be above the 2.5% target and the 3% top of the band. CPI shows Australia had an inflation problem prior to the Iran war start date.

@kit_lowe Hervey Bay! 🤣

From the vault. Jan 2021. Yamba is still not the new Byron. #RBA

@cmkusher I’ve been going to both since I was a kid but Yamba lacks an airport anywhere near it plus surprisingly I find it has more mozzies, midgies and sand flies despite being further south than Byron. But it has way less in town traffic so that’s a plus.

@kit_lowe Hot take, Byron is beautiful but sucks Yamba is way better.

*EU, AUSTRALIA AGREE TO FREE TRADE DEAL, JOINT STATEMENT SAYS

I expect some sort of EU-Australia FTA to be signed this week. Of interest would be the reaction of party political leaders to this particularly the leader of the current populist party. When will the media ask the hard questions?

NZ announcing targeted fiscal stimulus $NZD *NZ'S WILLIS: SUPPORT FOR 12 MONTHS OR UNTIL FUEL UNDER NZ$3/L *NZ'S WILLIS: ABOUT 143,000 FAMILIES TO GET NZ$50 MORE A WEEK *NZ'S WILLIS: GOVT TO PROVIDE SUPPORT FOR FAMILIES FROM APRIL 7

“We are likely to see higher headline inflation over the near term, and somewhat weaker growth momentum,” Governor Breman says.

$NZD Will be an interesting speech by RBNZ Gov Breman tomorrow. The RBNZ had previously advised that the speech would touch on the current economic outlook, drawing on insights from the February Monetary Policy Statement, but market interest was heightened after the narrative to the speech was changed to talking about the wider economic impact of the ongoing conflict in the Middle East. NZ 2y swap yields have risen 78bps since the start of the month and swaps markets have moved from pricing one 25bps hike by end 2026 to 3.5 hikes. Since Breman is new to the Antipodes she needs to talk tough on inflation particularly with the govt likely to announce some sort of targeted stimulus on the same day. The RBNZ much like the RBA, has a bad starting point with inflation at 3.1% already above the top of the 1-3% target band before the current crisis.

Consumer inflation expectations almost at 7% which partly explains the record low in consumer confidence along with the RBA rate hike. #auspol

More issues in private credit *APOLLO CAPS PRIVATE CREDIT FUND WITHDRAWALS AS REQUESTS HIT 11%

@IFM_Economist They hedge via longs in WTI futures but the crack spread is way wider so they are severely under hedged

Air travel costs could rise as aviation fuel prices rise sharply, another upside risk to CPI. However major airlines hedge fuel costs and long a 24 months out so this may temper some of the increase.