Nikko Asset Management Co-Head Predicts One More Rate Hike by RBA

If James Alexander at Nikko Asset Management were in the shoes of Reserve Bank governor Michele Bullock, he would hold the cash rate steady because raising it again would bring painful job losses .

Late last year, the US 10-year Treasury notes yield turned below the Fed funds rate at a time when the Federal Reserve still had 150 basis points of rate rises under its belt. Such a yield inversion–when short-term borrowing rates top long-term ones, typically occurs at the end of a tightening cycle when the markets’ focus switches to the start of the next cycle– rate cuts.

He finds China’s sovereign debt attractive because the People’s Bank of China is among the few central banks that manage interest rates in the “traditional way”, unlike its peers which have adopted quantitative easing or bond buying. He also likes Australian 10-year government bonds because of the country’s “normally shaped” yield curve, as opposed to the US inverted curve.

“Taking it off negative would be a great start, but they’ve been supporting their bonds and currency for so long now that the big challenge for them is how the central bank can do it without some very disruptive market behaviour,” he says.Mr Alexander anticipates the first cash rate lift early 2024, but is not ruling off late this year.Earlier this month, Alexander lowered the fund’s exposure to US and Japanese equities following sharp movements in volatility indicators.

Nikko Asset Management Reserve Bank Of Australia RBA Cash Rate Rate Hike Job Losses Economy Interest Rates

Australia Latest News, Australia Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

RBA interest rates: NAB backflips on home loan paymentsNAB abandoned an assurance that it would only increase monthly mortgage repayments on the 12-month “anniversary” of variable home loans, after rapid-fire interest rate rises caught the bank off guard.
Source: FinancialReview - 🏆 2. / 90 Read more »

‘Difficult balancing act’: RBA trying to control inflation and satisfy consumersThe RBA has a “difficult balancing act” between controlling inflation and also making sure consumers can get through the end of the year, says Bank of America’s head of Australia and New Zealand economics, Vice-President Micaela Fuchila.
Source: SkyNewsAust - 🏆 7. / 78 Read more »

AustralianSuper, HESTA, Aware Super, UniSuper, Insignia, AMP CEOs pledge to outperform CPI as rates soarThey say they can still meet their ambitious objectives of beating inflation by 3-4 per cent and that they may even make money as previously expensive asset classes cheapen.
Source: FinancialReview - 🏆 2. / 90 Read more »

Sam Bankman-Fried admits to ‘large mistakes’ in crypto fraud trial testimonyBankman-Fried says his biggest mistake was not implementing a dedicated risk management team for crypto trading platform FTX
Source: GuardianAus - 🏆 1. / 98 Read more »

Mercer to take over ING’s $3b Living Super bizMercer has taken over the management of Dutch bank ING’s Aussie pensions business, dubbed Living Super, which manages nearly $3 billion.
Source: FinancialReview - 🏆 2. / 90 Read more »

Sharon Graham's sinister web of sex and deception ended in the bloody murder of Bruce SaundersSharon Graham has been found guilty of masterminding the so-called 'woodchipper murder' of the mild-mannered Bruce Saunders — a cash-poor but asset-rich man deemed to be worth more dead than alive.
Source: abcnews - 🏆 5. / 83 Read more »