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10 Aug 2019 (AFR) – Low rates are the weeds of the equity market

(10 August 2019, AFR, p23, Vesna Poljak, Markets Editor)

Cash rate and the Australian yield curve (Deutsche Bank, AFR)

Cash rate and the Australian yield curve (Deutsche Bank, AFR)

‘The Australian cash rate is inching closer to the zero lower bound, the same sharemarket that hit a record high in July just had its worst week in nine months, and earnings season is off to a rocky start. On what might eventually be recalled as a historic day, Reserve Bank governor Philip Lowe acknowledged the “unlikely” but real prospect the central bank conducts quantitative easing. The 10-year government bond yield hit a record low 0.951 per cent on Friday. Deutsche Bank economist Phil O’Donoghoe issued the most bearish forecast in the field for the cash rate, predicting Reserve Bank cuts in September, October and November to arrive at a 0.25 per cent cash rate this year.’

Read more (and see more graphs) at AFR.com (might need AFR log in access, or try: AFR.com/trial)

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