Grantspearo

[Grantspearo @LoweforPM]

@TheWhiteWhaleHL Congratulations, what platform offers 25x leverage?

[Grantspearo @LoweforPM]

@HenrikZeberg https://t.co/lNYukv2tdx

[Henrik Zeberg @HenrikZeberg]

@bluewolfpack1 Yields just topped. they will give a lot of relief + same from DXY coming months

[Grantspearo @LoweforPM]

@TheKouk Is this rare https://t.co/CVtIomBbhF

[christopher joye @cjoye]

We've been arguing for some months now that a dovish RBA would look to cut rates in February. Following the weak 0.5% core inflation print yesterday (notably across both the trimmed mean and weighted median measures), financial markets put the probability of an RBA rate cut in February at between 90-92%. The RBA was expecting a much higher, 0.7% result. Headline inflation is now only 2.4% year-on-year, which is below the mid-point of the RBA's target 2-3% band (core year-on-year is still 3.2% vs the extant RBA forecast of 3.4%). Markets are pricing a high probability of the RBA slashing the cash rate from 4.35% down to 3.5% by December this year, or by 85bps (0.85 percentage points). Our chief macro strategist Kieran Davies has furnished the following summary:

-The RBA board meets on 17 and 18 February and will release updated forecasts when it announces its policy decision on the second day.

-At this stage, the board will probably act on its recently-adopted easing bias, cutting the cash rate by 25bp from 4.35% to 4.1% given underlying inflation came in lower than forecast in Q4.

-The trimmed mean CPI rose by 0.5% in Q4 after a 0.8% increase in Q3, which was below the RBA staff forecast of 0.7%, with annual inflation slowing from 3.6% to 3.2%.

-Substantial direct government subsidies – which are treated as an effective price reduction by the ABS – held down headline inflation in the quarter, while electricity subsidies alone took about 0.1pp off trimmed mean inflation in Q4 by changing the distribution of price changes.

-The Q4 outcome was the largest downside surprise for the RBA in a year and suggests that the staff should tweak the year-ahead forecast for inflation in the February Statement on Monetary Policy, although perhaps not by much given that a simple extrapolation of the monthly core CPI excluding electricity suggests that the trimmed mean CPI could rise by about 0.6-0.7% in Q1, close to the staff’s November forecast.

-Assuming that the RBA does cut rates next month, it seems likely that the eventual easing cycle should be relatively shallow, barring global extreme fall-out from Trump policies.

-This is reflected in the RBA estimating the neutral cash rate at about 3½% and with the resilience of the labour market, where a 4% unemployment rate is well below the 4¾% staff midpoint estimate of the NAIRU.

-In terms of the other detail of the CPI report, our experimental measures of trimmed mean goods and services inflation both improved sharply in Q4, with annualised goods inflation easing to ¾% and services inflation slowing to 3%.

-The broader goods/split of the monthly headline CPI tells a similar story of weaker goods inflation, albeit with more persistent services inflation.

-By item, ignoring the temporary effect of the subsidies, perhaps the most encouraging sign for the RBA was the slight fall in new home prices in Q4, which are the largest component of the CPI basket, marking the first decline since 2021.

[Grantspearo @LoweforPM]

@UrbanKaoboy @strandfund Any market views?

[Grantspearo @LoweforPM]

@agurevich23 Explain residential real estate

[Grantspearo @LoweforPM]

@sidprabhu @boazweinstein Sid, can you please approve my follow? - it says 'pending'

[Grantspearo @LoweforPM]

@AvidCommentator They'll draw on super

[Grantspearo @LoweforPM]

@QCompounding 👋

[Compounding Quality @QCompounding]

This PDF will teach you more than an MBA.

It will even make you smarter than most fund managers.

10.000 (!) pages full of investing wisdom from Warren Buffett, Terry Smith, Howard Marks and many more.

To receive it:
1️⃣ Follow us
2️⃣ Retweet this tweet
3️⃣ Reply 👋 below

[Grantspearo @LoweforPM]

@jam_croissant Ser where r the 🍌's? That's some scratch

[Grantspearo @LoweforPM]

@Yowai______ @AnalyticaB @Norseman1 @jam_croissant Long through SPX options expiry or no position/short ?

[Grantspearo @LoweforPM]

@INArteCarloDoss Meow

[Grantspearo @LoweforPM]

@INArteCarloDoss @kittysquiddy Taylor Hawkins - rip, and now this:
Can you allow me access/open dm's .