Global central banks maintained their fight against inflation this month with the Bank of England, Fed, ECB and RBA all hiking interest rates, most moves were expected but the rhetoric has remained on the hawkish side which has restrained equities although they are still largely close to their multi-month highs. The minutes from the RBA’s May meeting did stocks no favours on Tuesday as they reiterated that “further increases in interest rates may be required” although such a move would depend on how the economy and inflation travelled through 2023/4. In our opinion a major risk to the “risk on” trade is markets are looking for a central bank pivot leaving plenty of room for disappointment for the dovish investors:
