Pete Wargent blogspot

Co-founder & CEO of AllenWargent property advisory & buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.

4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete Wargent is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.

Invest in Sydney/Brisbane property markets, or for media/public speaking requests, email pete@allenwargent.com

Sunday, 9 April 2017

Zero hour

ZIRP

Are Australian interest rates on a long slow march to zero?

I think it's fair to say that the Reserve Bank of Australia (RBA) has been a reluctant cutter through this cycle. 

But we might yet end up hitting the zero lower bound anyway, with a few of the contributory factors noted below.

Record iron ore stockpiles are now beginning to bite, with the commodity price now entering a bear market. 


Sure, coking coal prices have spiked 40 per cent this week, but that's more than likely going to be a temporary issue (and Australian supply has been a key factor anyway). 

The Trump trade may finally be running out of legs, with military action on the cards.

Yields on Australian bonds have accordingly fallen back over recent weeks.

Core inflation is currently tracking at just 1.55 per cent, well under the target range, with the inflation figures for the March 2017 quarter due out towards the end of the month. 

Analysts expect the quarterly result to come in under the target range again, though an average print of 0.4 may be just about considered acceptable if it nudges the annual rate of core inflation back up to about 1.8 per cent. 

The question that nobody seems to have answered satisfactorily is what will plug the gap when residential construction turns down.

For now dwelling approvals remain quite elevated, held up by Sydney and Melbourne, and indeed AIG records all three of its performance indices in expansion territory, including manufacturing (57.5), construction (51.2), and services (51.7). 

But the actual level of dwelling construction activity appears to be slowing, particularly for apartments, and most certainly in Brisbane.

In the US and the UK ultra-low policy has seen the unemployment rates decline to just 4.5 per cent and 4.7 per cent respectively, yet in Australia unemployment has levitated back up to 5.9 per cent.

The March Labour Force figures will be released on Thursday - let's hope for some vital signs.