International News (Issue 403) – 10 June 2016

 Of interest from offshore this week, there were several items.

The remarks from Fed Governor Janet Yellen that last month’s disappointingly light employment figures were worth acknowledging, seemed to take the prospect of a June rate hike off the table.

Again, I would remark that the timing of US interest rate rises is frankly an inane debate for anyone looking at markets beyond a 3-month view.

Whilst the timing of hikes seems to occupy investors’ attention, more interestingly the level of consumer inflation expectations continues to rise in the US, in line with rising energy prices, strong employment and continued strength in housing market confidence.

This is and should be a focus for investors considering the longer term and the potential that we see a short-term negative interest rate shock, not unlike 1994.

This is, again, just another risk to markets and another factor we consider when we patiently wait with our OVERWEIGHT in cash.

The bouncing oil price was good news this week, but notably many of the oil majors continue to comment that it will take prices above $60/barrel for a SUSTAINED PERIOD before production restarts.

This is encouraging news, and to my mind, demonstrative of further likely upside in oil prices in the second half of this year.

We saw record lows in German 10-year bond yields, which as at Thursday night are at 0.03% per annum for a 10-year investment. That is right.

European bonds continue to trade strongly as fears of a YES vote on Britain’s EXIT from the European Union mount. The date of that vote is Thursday 23rd June.

Disclaimer: This information has been prepared by Primestock Securities Limited ABN 67 089 676 068, AFSL 239180 (“Prime”). Prime accepts no obligation to correct or update the information or opinions in it. This information does not take into account your objectives, financial situation or needs. Before acting on this information, you should consider whether it is appropriate to your situation. It is recommended that you obtain financial, legal and taxation advice before making any financial investment decision. Prime is bound by the Australian Privacy Principles for the handling of personal information.


A unique and personal service approach and support for all your business advisory and personal wealth management needs

Request a consultation

A unique and personal service approach to support all your business advisory and personal wealth management needs.

Request a consultation