Australian bonds rose strongly on Thursday on the combination of improving sentiment towards a US-Iran resolution and the surprisingly soft local employment report. Inflation has been stoked by strong oil prices in recent months, but if we start to see further signs of the local economy weakening its likely to trump these fears and push bonds higher and yields lower. All businesses/people we speak to largely say they’re doing “it tough” to a greater or lesser degree, implying yesterday’s surprisingly weak economic read could just be the beginning.
- We are initially looking for a test of the 11,000 area by the FTSE, with new highs still feeling inevitable, ultimately a great read-through for the highly correlated ASX.
This morning we’ve looked at 4 ASX-listed ETFs which could enjoy some traction if the Doves wrestler control from the Hawks and the RBA doesn’t hike again in 2026.
NB: A central banker concerned about inflation remaining too high, believing interest rates subsequently need to stay elevated, is called hawkish, while policymakers pushing for rate cuts to support economic growth are considered dovish.
