The stagflation narrative continues with more countries hiking into recessions and the ECB hiking in a recession. Core CPI is still elevated and proving to be difficult to manage lower. Market commentators expecting a deflationary bust have so far been wrong. Higher for longer still.
EU in recession. EU is still hiking and committed to more hikes. See Christine Lagarde answer questions in this regard in the video below.
NZ in recession. New Zealand has hiked itself into a recession and is now pausing.
New Zealand Signals Tightening Cycle Done After Raising Rate [Bloomberg]
World Bank warns of a sharp slowdown for a wobbly global economy [Washington Post]
Press release [FED]
US CPI
ECB hikes 25bps. Not thinking about pausing.
Press release [ECB]
Australia's yield curve finally inverted (2-10yrs) reflecting a recession coming our way. Despite slowing commercial property, farming etc sectors there are still those capable of chasing house prices, fancy cars and equities higher. RBA will keep hiking until that financial exuberance has gone. Also RBA still needs to start reducing it's balance sheets -tightens monetary policy by itself.
By the time the RBA has realised it needs to cut rates, the economy will be in a deep recession.
Hostplus shuts property, infrastructure funds as valuations plummet [AFR]
The $100 billion super fund’s decision comes amid a reckoning over inflated valuations of Australia’s commercial property sector and warnings from APRA.
Farmland returns tank as higher rates, lower commodity prices bite [AFR]
Prime farmland returns turned sharply negative in the first three months of the year, according to the Australian Farmland Index.
RBA office renovation blows out to almost $500m [AFR]
Short 0.7000
Short 0.7100
Short 0.6775
Stop 0.6825
Positive carry
Position closed. Profit 133bps.