Liquidity flows: Economic cycle still on sustainable path

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The US economy has faced persistent fears of setbacks, but the recovery continues to move forward. Our proprietary liquidity indicator suggests that the economic cycle remains on solid ground and that GDP growth in 2016 will be faster than in 2015. About the Liquidity Flows Indicator The Bureau of Economic Analysis (BEA) designed the liquidity […]

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Are central banks losing their effectiveness?

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The use of low interest rates by central banks to help assist recovery is unlikely to have the desired effect, and may ultimately cause significant market disruption, says Chris Bedingfield, principal and portfolio manager at Quay Global Investors. “Much of the share market recovery since 2009 has been attributed to ‘easy money’ – including the […]

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Path to recession isn’t definite, but it’s getting clearer

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With the U.S. expansion reaching almost seven years of age, business balance sheets worsening and credit market debt to equity increasing, there is mounting concern that we are headed towards another economic recession. Principal Global Investors have released their latest economic insights paper by Chief Global Economist, Bob Baur, and Senior Global Economist, Robin Anderson, […]

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Innovation funding program a key building block for the future of Australia

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Australian venture capital firm OneVentures believes the National Commission of Audit’s recommendations to dissolve key innovation funding programs like the Innovation Investment Fund (IIF) would be a step backwards for Australia, calling on the Government to reinforce its support for these initiatives in the upcoming Federal Budget, citing innovation as the key in creating new […]

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Housing affordability improves, but first home-buyers still missing in action

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The Adelaide Bank/Real Estate Institute of Australia Housing Affordability Report for the September quarter 2013 recorded an improvement in housing affordability with the proportion of income required to meet loan repayments decreasing 1.2 percentage points to 29.8%. Compared to the same quarter of the previous year, the figure fell 3.5 percentage points. All states and […]

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Capex – QIII 2013

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Mining capex looks set to plateau at close to 8% of GDP in 2013/14.  The real drag on GDP growth from falling mining capex looks to be some time away. The non‑mining investment outlook looks stronger than that reported in the previous capex survey three months ago. The ABS capex survey underestimates non‑mining capex.  Other […]

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Inflation or Deflation: Are we about to find out?

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Avid readers of The van Eyk View and our other publications know all too well the importance we give to inflation regimes as predictors of future returns. In fact, in the Interactive Asset Allocation Model recently made available on our online research portal iRate, the likelihood attributed to each of four different inflation scenarios (Functional […]

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Weekly economic & market update

Europe is continuing to cause shockwaves in financial markets with increasing resistance to fiscal austerity (with the temporary collapse of the Dutch coalition Government and the Socialist candidate’s victory in the first round French Presidential elections), more soft economic data including 24.4% Spanish unemployment and Standard & Poor’s downgrading of Spain. However, Europe will probably […]

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Rate cut all but certain after weak inflation data

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The Consumer Price Index – the main measure of inflation in Australia – rose by 0.1 per cent in the March quarter, well below expectations centred on a 0.6 per cent rise in prices. In seasonally adjusted terms the CPI fell by 0.2 per cent. The CPI stands just 1.6 per cent higher than a […]

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Aussie 10-year bond yields hit 61-year low

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Yields on Australian 10-year bonds have fallen to the lowest levels since the early 1950s. This week, Aussie 10-year government bond yields hit 3.648 per cent – the lowest yield since June 1951 when yields averaged 3.51 per cent, according to Reserve Bank data. Australian 3 year bonds also ease. Yields on 3-year bonds hit […]

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