August 10, 2025 • 17 mins
Asian stocks were set for a cautious open ahead of key economic data and a looming deadline on the potential extension of US tariffs on Chinese exports. US stock futures were steady while the dollar was in a tight range against major peers in early Asian trading. Traders are looking ahead to critical economic data from the US which could shape interest-rate expectations. One key data point will be the US inflation print, which will provide more insight into the Federal Reserve's rates outlook, with fears the economy is teetering on the edge of stagflation. For more, we speak with Eric Sterner, Chief Investment Officer at Apollon Wealth Management.
Plus - Australia's central bank is poised to deliver its third interest-rate cut this year as inflationary pressures ebb, while Governor Michele Bullock is expected to stick with her cautious stance on the monetary policy outlook. Traders and most economists polled by Bloomberg anticipate the Reserve Bank of Australia will lower its cash rate by 25 basis points to 3.6% on Tuesday, bringing its cumulative easing in the current cycle to 75 basis points. For a closer look, we hear from Swati Pandey, Bloomberg Economy and Government Reporter in Sydney. She speaks with Bloomberg's Avril Hong and Paul Allen on The Asia Trade.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:10):
Welcome to the Bloomberg Daybreak Asia podcast. I'm Doug Krisner.
We're expecting a flurry of economic data points in the
week ahead. In the Asia Pacific. The big numbers are
due on Friday, when China will report on retail sales
and industrial production. Now in the States, Tuesday's report on
retail inflation will be a major focus. These numbers should
(00:31):
help firm expectations on the timing of the next FED
rate cut. Also Tuesday, we'll have a rate decision from
the Reserve Bank of Australia. And in a moment we'll
hear from Swati Pondi, Bloomberg ECOGUV reporter in Sydney. But
we begin here in the States. Joining me now is
Eric Stirner. He is the chief investment officer at a
(00:52):
Pollen Wealth Management. Eric, thank you so much for making
time to chat with me. Quite up rally that we
had in big cap tech Friday, Nasdaq comps a record
closing high twenty one four fifty. Are you continuing to
buy into this thesis that you've got to be in
big cap tech, particularly given the trade in artificial intelligence?
Speaker 1 (01:11):
Yeah? Well, first, thanks for having me, And yeah, I
mean it's interesting because so many have predicted that other
sectors were going to take the leadership role from these
mega techs, But here we are, the mega techs still
leading away, and their earnings are just continued just to
knock the ball out of the park. And I still
(01:32):
think we're in the very early endings of this AI revolution.
And yes, you know some have not the make a
touch for their rich valuations, but they continue to warnt
them with the strong earnings and strong outlooks, so I
think they'll continue to be the leaders in this market.
Speaker 2 (01:49):
So I mentioned a moment ago that we have CPI
data this week. Over the weekend, we heard from FED
Governor Michelle Bowman. She's favoring three cuts this year and
she's urging her fellow policymakers to begin making that type
of move at the September meeting. What are your expectations
right now for the Fed?
Speaker 1 (02:08):
Well, what, you know, I believe that the Fed should
have cut rates this last meeting. And of course, you
know I'm saying that after the non farm non farm
payroll report came out on Friday with those major revisions.
But we've just even before those those revisions of the
Junior Report, we've seen plenty of evidence of the labor
(02:29):
market moderating between elevated continued claims. We still are in
this low higher, low fire environment where it's really hard
for those unemployed individuals out there trying to get a job.
And even the ADB Private Payrolls has really shown how
these restrictive rates are really choking smaller companies. In the
(02:51):
last two months, you know, companies with over five hundred
employees have added seventy eight thousand jobs, but smaller companies
with less than fifty employees they've actually shed twenty nine
thousand jobs. So I think, you guys, the FED needs
to be ahead of this because once that the labor
(03:12):
market typically is the last economic indicator to fall before
any economic downturn, and once that unemployment rate starts ticking higher,
it can quickly gain velocity. So I'm hoping that the
FED and people like Waller and Bowman and everyone else
gets on board looks at cut rates starting in September,
(03:33):
and who knows, maybe we'll see three cuts, but of
course that all depends on con how the rest of
the inflation reports and labor market reports come in for
the rest.
Speaker 2 (03:41):
Of the year most definitely, And right now, I think
we can agree that inflation remains a little stubborn here
at around two seven. At the end of the week,
we'll hear from the University of Michigan and one year
inflation expectations that will be a keen number. Is there
the risk that growth begins to kind of remain luggish
in the face of high inflation? And I know that
(04:03):
the term stagflation has been thrown around a little bit lately,
But is that a concern that we should kind of
focus on a little bit.
Speaker 1 (04:11):
It's something that certainly we we factor it into our
portfolios and as we determine allocations. It's not my base case,
but but certainly, you know, it's a risk that we
need to account for. I mean, I think I'm not
as concerned. I'm slightly concerned. Just just last month, or
(04:32):
in the month of Junior, we saw import prices We're
only up zero point one percent, and May import numbers
were actually down zero point four percent. So I think
what's that that's showing us is that foreign exporters are
eating some of these tariffs. So that's why I don't
think we're going to see. Yes, we probably may see
(04:52):
a few bumps in inflation between you the next few months,
but I don't think it's I think it's going to
be transitory in nature because we're in a much different
macro environment. We see consumer spending still healthy but moderating,
same with retail sales, So that's why I'm not as
concerned about stagflation, but certainly not something we can all
(05:13):
rule out.
Speaker 2 (05:14):
Are you focused squarely on the equity market these days
as a place to put capital to work or do
you want to be maybe looking at portions of the
fixed income markets.
Speaker 1 (05:25):
Yeah, we know. We like at all markets, both on
the public and private side, and I still think that
there's great opportunities in the fixed income markets. I think
the sweet spot still is in that short to intermediate
range because I think we're still going to We've seen
a lot of interest rate volatility between of course the
tariff and inflation concerns, but also just our budget deficit concerns,
(05:49):
so I think that volatility is still going to exist.
So that's why I remain on the short and medium
part of the fixed income curve. And then because I
think we are going to have us off landing I
really like high yields, the high yield that the credit
quality within the high yield market has improved tremendously. I
mean pre GFC only forty percent of high yields were
(06:13):
rated double B or higher. Today over fifty one percent
or rated double B or higher and eighty five percent
or B or higher. So I really like the fixed
the income market, and then for clients that it's suitable for.
We're also when we put together portfolios, looking at private markets,
between private credit, private equity, infrastructure. We know there's a
(06:36):
lot of infrastructure spending needed in this country, so we're
looking at all areas in the market because I do
think volatility will remain elevated. So we're just looking at
every asset class to build a more diversified portfolio for
our clients these days.
Speaker 2 (06:52):
Are you looking at markets offshore as well?
Speaker 1 (06:55):
Yes, oh, absolutely. We've always maintained allocations to international well.
Of course, that's really helped this year. I mean it's
been a great story on the international front. I do
think that the US may reassume leadership at least for
the second half of this year. You know, of course,
the dollar depreciating is going to help companies especially large
(07:18):
cat companies with a lot of revenues overseas. While it's
going to be a head wind for European and other countries,
and I think there was so much front running on
the tariffs that that's as that fades, that's going to
draw down on some of the profits from these European exporters.
So while I still will always be an advocate for
(07:41):
having international allocation, especially as the world back pedals from globalization,
I think that's going to lower the correlation between international
markets and domestic markets, which will help build more diverse
five portfolios. But because of those reasons, and I think
I think the international equities are going to take breather well.
On the US side, we've seen a lot of the
(08:04):
cloud of uncertainty start to dissipate. We have the one
Beautiful Bill law signed in the place, so everyone knows
that what's in that bill, and now we're starting to
see trade agreements coming to place between with the EU, Japan,
South Korea, and of course the White House administration still
has some work to do, but as we remove more
(08:25):
uncertainty and deregulation plans are probably on the horizon the
second half of this year. I expect the US markets
to continue to march higher.
Speaker 2 (08:34):
So before I let you go speaking of the US,
I want to get your sense of how the American
consumer is holding up. At the end of the week,
we'll get the reading on July retail sales. How do
you think American consumers are doing right now?
Speaker 1 (08:49):
At an aggregate level, I think the consumer remains healthy.
We've seen the consumer networth increase over fifty trillion since
the pandemic. But I do think it's becoming a very
bifurcated story, especially with these higher rates. I mean, I
think the higher end consumer benefit it more from the
(09:10):
stock market appreciation, you know, two straight years of twenty
plus percent returns, and the home equity are quickly rising.
You know, the low rank consumer might not have as
much exposure there. And just looking at the consumer spending,
I mean, fifty percent consumer spending comes from the top
(09:30):
ten percent of income high income earners, and thirty years
ago that ten percent of high income earners represented thirty
six percent. So there is some concern that's becoming a
little bit more bifurcated. But at an aggregate level, while
we see reports of credit rising and loans rising, the
(09:52):
household balance sheets are healthier right now than they were
pre pandemic. In fact, the household debt ratio is at
eleven point two percent right now, and the nine years
before the pandemic it was actually eleven point eight. So
that tells me that, yes, some of the low rane
consumers are feeling the strange from higher rates, but overall
(10:14):
the consumer does remain healthy and that also helped warrants
or feeds into my bullish outlook for the remainder of
this year.
Speaker 2 (10:23):
Okay, we'll leave it on that bullish outlook with Eric Sterner. Eric,
thank you so much. Eric is chief investment officer at
a Pollen Wealth Management. Joining here on the Daybreak Asia podcast.
Welcome back to the Daybreak Asia podcast. I'm Doug Chrisner.
(10:45):
Traders in the Asia Pacific will be watching tomorrow's rate
decision from the Reserve Bank of Australia now. Back in July,
Governor Michelle Bullock faced some tough questions after the RBA
held its policy rates steady. This time around, she's expected
to stay with her cautious stance on the monetary policy outlook.
Rebecca Jones is Bloomberg's managing editor for Australia and New Zealand.
Speaker 3 (11:08):
We've got an unemployment rate that's not only trending high,
but it's also above what our Central Bank has been projecting.
So it does look like it's not going to be
the curveball of last month. All twenty seven economists that
we survey are predicting that we're going to get that
twenty five basis pointcut.
Speaker 2 (11:26):
That is Bloomberg's Rebecca Jones in Melbourne. For more, we
heard from Swati Pondi, Bloomberg's Eco GUV reporter in Sydney.
Swati spoke with Bloomberg TV host Avril Honk and Paul
Allen on the Asia Trade.
Speaker 4 (11:39):
Swati last meeting, we thought this is it, We're easing,
but it didn't happen surely this time at a walk.
Speaker 5 (11:45):
That's what a lot of people are saying as well.
Economists expecting a cut, and one of the reasons is
that they think the appetite to shock the market for
the RBI is pretty small. Now markets are expecting fully
pricing in a cut. Economists are ascribing a seventy five
(12:06):
percent chance, seventy five eighty percent chance of a cut.
We had inflation data which showed a cooling down in
prices from the previous quarter, and unemployment data showed that
the jobless rate is going up a bit. So put together,
(12:27):
it does look like the RBA could ease by twenty
five basis points in August, but it's likely to be
a hawkish cut.
Speaker 2 (12:34):
Yeah, I was just gonna ask Swatty in terms of
forward guidance, how much is the RBA going to realistically
be letting on.
Speaker 5 (12:43):
Governor Michelle Bullock has said in the past recent months
that the RBA strategy is going to be gradual easing,
going to be one of gradual easing, and that is
the message that she's likely to read rate tomorrow at
her press conference as well. So after tomorrow's cut, if
(13:07):
that happens, markets are expecting one more and there's a
fifty to fifty chance of a third, So there's not
a lot of easing that's being priced by markets. And
it's the case is similar for economists as well, and
I think Michelle Burdock is likely to either she will
(13:30):
say that we are fine with that pricing or signal
that they are fine with that pricing, it's just one
or two cuts, or she will further push back against
that against that pricing, saying signaling that the RBA is
probably at neutral stands at the moment and they would
likely to just be on a prolonged pause here.
Speaker 4 (13:50):
Well, there was some strong expectation that we would get
eating at the last meeting, and as I said, it
didn't happen. But that did lead to some criticism of
the ABA's communication. Was that warranted.
Speaker 5 (14:00):
Yes, the RBAS communication has been a bit whiplashy this year.
So when they met for the first time this year
in February, they cut interest rates and they sounded quite hawkish,
and then in April they sounded really dubbish. Remember this
(14:21):
was the meeting just one day before Liberation Day. Uh
So there was a lot of uncertainty in the market,
there was a lot of volatility, and so they were
rightly extremely dubbish. And then the main meeting happened and
they were again hawkish, and then July they did not cut.
(14:42):
So it's people are saying that it's really hard to
discern their signals. It's hard to understand what they would do.
Speaker 1 (14:50):
Uh.
Speaker 5 (14:50):
In RBA's defense, they have a new monetary policy board
now and they have a new structure where they are voting,
so it her defense, Michelle Bullock said that it's very
hard for her to pre enpt what the board would
do because she doesn't know how which way people would vote,
and that adds to the uncertainty. So I think through
(15:13):
the course of this year, maybe next year, as the
as votes are revealed, as we get more idea about
how they are responding to data, how they are responding
to the available information, then probably people will be able
to better assess how the RBA would react.
Speaker 4 (15:33):
And of course RBA policy so closely linked to the
national sport of real estate, can we pretty much time
our watch to easing from the RBA to another rise
in house prices, which are already and have been in
those bleed territories for.
Speaker 1 (15:47):
A long time.
Speaker 5 (15:48):
It's already happening. It's already happening. House prices are on
a tear again and that is a big concern. There
was a report from Rey White Group to David said
that every single day, twenty four unaffordable houses are being
added to the market, which basically is another way of
saying that every single day the number of unaffordable housing
(16:10):
in the country is rising by twenty four and that
is a big number if you put it in perspective
of the whole year, right, So we definitely have that
problem of unaffordability. Some economists are saying that is one
of the reasons we will not see a huge spike
in prices, but definitely easing monetary policy and easier borrowing
(16:35):
costs to make housing more attractive for people who can
afford it.
Speaker 4 (16:40):
All right, Economy reporter Swatty Pandi theres we count down
to the ABA decision on Tuesday.
Speaker 2 (16:48):
Thanks for listening to today's episode of the Bloomberg Daybreak
Asia Edition podcast. Each weekday, we look at the story
shaping markets, finance, and geopolitics in the Asia Pacific. You
can find it us on Apple, Spotify, the Bloomberg Podcast
YouTube channel, or anywhere else you listen. Join us again
tomorrow for insight on the market moves from Hong Kong
(17:09):
to Singapore and Australia. I'm Doug Prisoner and this is
Bloomberg
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:10):
Welcome to the Bloomberg Daybreak Asia podcast. I'm Doug Krisner.
We're expecting a flurry of economic data points in the
week ahead. In the Asia Pacific. The big numbers are
due on Friday, when China will report on retail sales
and industrial production. Now in the States, Tuesday's report on
retail inflation will be a major focus. These numbers should
(00:31):
help firm expectations on the timing of the next FED
rate cut. Also Tuesday, we'll have a rate decision from
the Reserve Bank of Australia. And in a moment we'll
hear from Swati Pondi, Bloomberg ECOGUV reporter in Sydney. But
we begin here in the States. Joining me now is
Eric Stirner. He is the chief investment officer at a
(00:52):
Pollen Wealth Management. Eric, thank you so much for making
time to chat with me. Quite up rally that we
had in big cap tech Friday, Nasdaq comps a record
closing high twenty one four fifty. Are you continuing to
buy into this thesis that you've got to be in
big cap tech, particularly given the trade in artificial intelligence?
Speaker 1 (01:11):
Yeah? Well, first, thanks for having me, And yeah, I
mean it's interesting because so many have predicted that other
sectors were going to take the leadership role from these
mega techs, But here we are, the mega techs still
leading away, and their earnings are just continued just to
knock the ball out of the park. And I still
(01:32):
think we're in the very early endings of this AI revolution.
And yes, you know some have not the make a
touch for their rich valuations, but they continue to warnt
them with the strong earnings and strong outlooks, so I
think they'll continue to be the leaders in this market.
Speaker 2 (01:49):
So I mentioned a moment ago that we have CPI
data this week. Over the weekend, we heard from FED
Governor Michelle Bowman. She's favoring three cuts this year and
she's urging her fellow policymakers to begin making that type
of move at the September meeting. What are your expectations
right now for the Fed?
Speaker 1 (02:08):
Well, what, you know, I believe that the Fed should
have cut rates this last meeting. And of course, you
know I'm saying that after the non farm non farm
payroll report came out on Friday with those major revisions.
But we've just even before those those revisions of the
Junior Report, we've seen plenty of evidence of the labor
(02:29):
market moderating between elevated continued claims. We still are in
this low higher, low fire environment where it's really hard
for those unemployed individuals out there trying to get a job.
And even the ADB Private Payrolls has really shown how
these restrictive rates are really choking smaller companies. In the
(02:51):
last two months, you know, companies with over five hundred
employees have added seventy eight thousand jobs, but smaller companies
with less than fifty employees they've actually shed twenty nine
thousand jobs. So I think, you guys, the FED needs
to be ahead of this because once that the labor
(03:12):
market typically is the last economic indicator to fall before
any economic downturn, and once that unemployment rate starts ticking higher,
it can quickly gain velocity. So I'm hoping that the
FED and people like Waller and Bowman and everyone else
gets on board looks at cut rates starting in September,
(03:33):
and who knows, maybe we'll see three cuts, but of
course that all depends on con how the rest of
the inflation reports and labor market reports come in for
the rest.
Speaker 2 (03:41):
Of the year most definitely, And right now, I think
we can agree that inflation remains a little stubborn here
at around two seven. At the end of the week,
we'll hear from the University of Michigan and one year
inflation expectations that will be a keen number. Is there
the risk that growth begins to kind of remain luggish
in the face of high inflation? And I know that
(04:03):
the term stagflation has been thrown around a little bit lately,
But is that a concern that we should kind of
focus on a little bit.
Speaker 1 (04:11):
It's something that certainly we we factor it into our
portfolios and as we determine allocations. It's not my base case,
but but certainly, you know, it's a risk that we
need to account for. I mean, I think I'm not
as concerned. I'm slightly concerned. Just just last month, or
(04:32):
in the month of Junior, we saw import prices We're
only up zero point one percent, and May import numbers
were actually down zero point four percent. So I think
what's that that's showing us is that foreign exporters are
eating some of these tariffs. So that's why I don't
think we're going to see. Yes, we probably may see
(04:52):
a few bumps in inflation between you the next few months,
but I don't think it's I think it's going to
be transitory in nature because we're in a much different
macro environment. We see consumer spending still healthy but moderating,
same with retail sales, So that's why I'm not as
concerned about stagflation, but certainly not something we can all
(05:13):
rule out.
Speaker 2 (05:14):
Are you focused squarely on the equity market these days
as a place to put capital to work or do
you want to be maybe looking at portions of the
fixed income markets.
Speaker 1 (05:25):
Yeah, we know. We like at all markets, both on
the public and private side, and I still think that
there's great opportunities in the fixed income markets. I think
the sweet spot still is in that short to intermediate
range because I think we're still going to We've seen
a lot of interest rate volatility between of course the
tariff and inflation concerns, but also just our budget deficit concerns,
(05:49):
so I think that volatility is still going to exist.
So that's why I remain on the short and medium
part of the fixed income curve. And then because I
think we are going to have us off landing I
really like high yields, the high yield that the credit
quality within the high yield market has improved tremendously. I
mean pre GFC only forty percent of high yields were
(06:13):
rated double B or higher. Today over fifty one percent
or rated double B or higher and eighty five percent
or B or higher. So I really like the fixed
the income market, and then for clients that it's suitable for.
We're also when we put together portfolios, looking at private markets,
between private credit, private equity, infrastructure. We know there's a
(06:36):
lot of infrastructure spending needed in this country, so we're
looking at all areas in the market because I do
think volatility will remain elevated. So we're just looking at
every asset class to build a more diversified portfolio for
our clients these days.
Speaker 2 (06:52):
Are you looking at markets offshore as well?
Speaker 1 (06:55):
Yes, oh, absolutely. We've always maintained allocations to international well.
Of course, that's really helped this year. I mean it's
been a great story on the international front. I do
think that the US may reassume leadership at least for
the second half of this year. You know, of course,
the dollar depreciating is going to help companies especially large
(07:18):
cat companies with a lot of revenues overseas. While it's
going to be a head wind for European and other countries,
and I think there was so much front running on
the tariffs that that's as that fades, that's going to
draw down on some of the profits from these European exporters.
So while I still will always be an advocate for
(07:41):
having international allocation, especially as the world back pedals from globalization,
I think that's going to lower the correlation between international
markets and domestic markets, which will help build more diverse
five portfolios. But because of those reasons, and I think
I think the international equities are going to take breather well.
On the US side, we've seen a lot of the
(08:04):
cloud of uncertainty start to dissipate. We have the one
Beautiful Bill law signed in the place, so everyone knows
that what's in that bill, and now we're starting to
see trade agreements coming to place between with the EU, Japan,
South Korea, and of course the White House administration still
has some work to do, but as we remove more
(08:25):
uncertainty and deregulation plans are probably on the horizon the
second half of this year. I expect the US markets
to continue to march higher.
Speaker 2 (08:34):
So before I let you go speaking of the US,
I want to get your sense of how the American
consumer is holding up. At the end of the week,
we'll get the reading on July retail sales. How do
you think American consumers are doing right now?
Speaker 1 (08:49):
At an aggregate level, I think the consumer remains healthy.
We've seen the consumer networth increase over fifty trillion since
the pandemic. But I do think it's becoming a very
bifurcated story, especially with these higher rates. I mean, I
think the higher end consumer benefit it more from the
(09:10):
stock market appreciation, you know, two straight years of twenty
plus percent returns, and the home equity are quickly rising.
You know, the low rank consumer might not have as
much exposure there. And just looking at the consumer spending,
I mean, fifty percent consumer spending comes from the top
(09:30):
ten percent of income high income earners, and thirty years
ago that ten percent of high income earners represented thirty
six percent. So there is some concern that's becoming a
little bit more bifurcated. But at an aggregate level, while
we see reports of credit rising and loans rising, the
(09:52):
household balance sheets are healthier right now than they were
pre pandemic. In fact, the household debt ratio is at
eleven point two percent right now, and the nine years
before the pandemic it was actually eleven point eight. So
that tells me that, yes, some of the low rane
consumers are feeling the strange from higher rates, but overall
(10:14):
the consumer does remain healthy and that also helped warrants
or feeds into my bullish outlook for the remainder of
this year.
Speaker 2 (10:23):
Okay, we'll leave it on that bullish outlook with Eric Sterner. Eric,
thank you so much. Eric is chief investment officer at
a Pollen Wealth Management. Joining here on the Daybreak Asia podcast.
Welcome back to the Daybreak Asia podcast. I'm Doug Chrisner.
(10:45):
Traders in the Asia Pacific will be watching tomorrow's rate
decision from the Reserve Bank of Australia now. Back in July,
Governor Michelle Bullock faced some tough questions after the RBA
held its policy rates steady. This time around, she's expected
to stay with her cautious stance on the monetary policy outlook.
Rebecca Jones is Bloomberg's managing editor for Australia and New Zealand.
Speaker 3 (11:08):
We've got an unemployment rate that's not only trending high,
but it's also above what our Central Bank has been projecting.
So it does look like it's not going to be
the curveball of last month. All twenty seven economists that
we survey are predicting that we're going to get that
twenty five basis pointcut.
Speaker 2 (11:26):
That is Bloomberg's Rebecca Jones in Melbourne. For more, we
heard from Swati Pondi, Bloomberg's Eco GUV reporter in Sydney.
Swati spoke with Bloomberg TV host Avril Honk and Paul
Allen on the Asia Trade.
Speaker 4 (11:39):
Swati last meeting, we thought this is it, We're easing,
but it didn't happen surely this time at a walk.
Speaker 5 (11:45):
That's what a lot of people are saying as well.
Economists expecting a cut, and one of the reasons is
that they think the appetite to shock the market for
the RBI is pretty small. Now markets are expecting fully
pricing in a cut. Economists are ascribing a seventy five
(12:06):
percent chance, seventy five eighty percent chance of a cut.
We had inflation data which showed a cooling down in
prices from the previous quarter, and unemployment data showed that
the jobless rate is going up a bit. So put together,
(12:27):
it does look like the RBA could ease by twenty
five basis points in August, but it's likely to be
a hawkish cut.
Speaker 2 (12:34):
Yeah, I was just gonna ask Swatty in terms of
forward guidance, how much is the RBA going to realistically
be letting on.
Speaker 5 (12:43):
Governor Michelle Bullock has said in the past recent months
that the RBA strategy is going to be gradual easing,
going to be one of gradual easing, and that is
the message that she's likely to read rate tomorrow at
her press conference as well. So after tomorrow's cut, if
(13:07):
that happens, markets are expecting one more and there's a
fifty to fifty chance of a third, So there's not
a lot of easing that's being priced by markets. And
it's the case is similar for economists as well, and
I think Michelle Burdock is likely to either she will
(13:30):
say that we are fine with that pricing or signal
that they are fine with that pricing, it's just one
or two cuts, or she will further push back against
that against that pricing, saying signaling that the RBA is
probably at neutral stands at the moment and they would
likely to just be on a prolonged pause here.
Speaker 4 (13:50):
Well, there was some strong expectation that we would get
eating at the last meeting, and as I said, it
didn't happen. But that did lead to some criticism of
the ABA's communication. Was that warranted.
Speaker 5 (14:00):
Yes, the RBAS communication has been a bit whiplashy this year.
So when they met for the first time this year
in February, they cut interest rates and they sounded quite hawkish,
and then in April they sounded really dubbish. Remember this
(14:21):
was the meeting just one day before Liberation Day. Uh
So there was a lot of uncertainty in the market,
there was a lot of volatility, and so they were
rightly extremely dubbish. And then the main meeting happened and
they were again hawkish, and then July they did not cut.
(14:42):
So it's people are saying that it's really hard to
discern their signals. It's hard to understand what they would do.
Speaker 1 (14:50):
Uh.
Speaker 5 (14:50):
In RBA's defense, they have a new monetary policy board
now and they have a new structure where they are voting,
so it her defense, Michelle Bullock said that it's very
hard for her to pre enpt what the board would
do because she doesn't know how which way people would vote,
and that adds to the uncertainty. So I think through
(15:13):
the course of this year, maybe next year, as the
as votes are revealed, as we get more idea about
how they are responding to data, how they are responding
to the available information, then probably people will be able
to better assess how the RBA would react.
Speaker 4 (15:33):
And of course RBA policy so closely linked to the
national sport of real estate, can we pretty much time
our watch to easing from the RBA to another rise
in house prices, which are already and have been in
those bleed territories for.
Speaker 1 (15:47):
A long time.
Speaker 5 (15:48):
It's already happening. It's already happening. House prices are on
a tear again and that is a big concern. There
was a report from Rey White Group to David said
that every single day, twenty four unaffordable houses are being
added to the market, which basically is another way of
saying that every single day the number of unaffordable housing
(16:10):
in the country is rising by twenty four and that
is a big number if you put it in perspective
of the whole year, right, So we definitely have that
problem of unaffordability. Some economists are saying that is one
of the reasons we will not see a huge spike
in prices, but definitely easing monetary policy and easier borrowing
(16:35):
costs to make housing more attractive for people who can
afford it.
Speaker 4 (16:40):
All right, Economy reporter Swatty Pandi theres we count down
to the ABA decision on Tuesday.
Speaker 2 (16:48):
Thanks for listening to today's episode of the Bloomberg Daybreak
Asia Edition podcast. Each weekday, we look at the story
shaping markets, finance, and geopolitics in the Asia Pacific. You
can find it us on Apple, Spotify, the Bloomberg Podcast
YouTube channel, or anywhere else you listen. Join us again
tomorrow for insight on the market moves from Hong Kong
(17:09):
to Singapore and Australia. I'm Doug Prisoner and this is
Bloomberg
Popular Podcasts
Fudd Around And Find Out
UConn basketball star Azzi Fudd brings her championship swag to iHeart Women’s Sports with Fudd Around and Find Out, a weekly podcast that takes fans along for the ride as Azzi spends her final year of college trying to reclaim the National Championship and prepare to be a first round WNBA draft pick. Ever wonder what it’s like to be a world-class athlete in the public spotlight while still managing schoolwork, friendships and family time? It’s time to Fudd Around and Find Out!
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.