The Italian election and European risk

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This edition of Oliver’s Insights looks at the implications of the Italian parliamentary elections. The key points are as follows: An inconclusive election in Italy, which has put a cloud over whether it will continue with economic reforms, has seen the return of worries regarding the Euro-zone. Uncertainty is likely to linger for several weeks,

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Weekly market and economic update

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Shares were hit mid week by concerns triggered by the minutes from the last Fed meeting that it may exit quantitative easing earlier than had been thought, renewed property tightening in China and soft economic data. However, while these were the triggers, shares had become vulnerable to a pause or correction after a huge surge

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Oliver’s Insights – What’s the chance of a bond crash?

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This edition of Oliver’s Insights looks at the outlook for government bonds and specifically the risk of a 1994 style bond crash. The key points are as follows: Sovereign bonds have had a great run, but with yields near record lows and global growth improving this is unlikely to continue. A 1994 style bond crash

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Weekly economic and market update

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The rally in shares continued over the past week with the Australian All Ordinaries index rising above the 5000 level for the first time since April 2011, helped by good profit results adding to confidence that the profit cycle is turning up, a strong rise in consumer confidence and news that a Chinese company is

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Weekly economic and market update

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Worries about Europe have flared up again with Berlusconi gaining in the polls in Italy ahead of elections in two weeks and corruption allegations against the Spanish Prime Minister. However, it’s hard to see Berlusconi getting enough votes to return as PM with the most likely outcome being a Social Democrat led government relying on

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A new bull market in shares?

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After recent strong gains, shares are overbought and vulnerable to a correction. February is often a soft month with risks regarding Italy, Spain, the US budget and earnings results in Australia. However, the pattern of rising highs and lows since late 2011, reasonable valuations, improving global economic news and easy monetary conditions suggests shares have

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Weekly market & economic update

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January has wrapped up with strong gains in shares. There’s an old saying, “as goes January so goes the year” which is often referred to as the January barometer. While it’s not reliable when shares fall in January, since 1980 up Januarys in Australia have had a 70% hit rate of going on to see

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Weekly economic and market update

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The flow of good global news continued over the past week. Good news included: flash manufacturing conditions PMIs rising in the world’s big 3 regions, ie China, Europe and the US; Japan adopting a 2% inflation target and open ended quantitative easing; an extension to America’s debt ceiling; & European banks set to pay back

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2013 – a list of lists

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The attached edition of Oliver’s Insights provides a summary of key views on the economic and investment outlook in simple point form. The key points are as follows: – 2013 is likely to be another good year for investors underpinned by a lessening in tail risks, very easy global monetary conditions and improving global growth. – Watch global

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Japanese reflation – very positive for global economy and Australia

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The announcement that the Bank of Japan is raising its inflation target to 2% and adopting open ended quantitative easing is very positive. Options for further fiscal stimulus in Japan are severely limited by already world beating budget deficit and public debt levels. Half hearted monetary stimulus from the Bank of Japan has played a

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