Note from the MD: Markets await rate signals, following RBA Governor appointment

Markets responded favourably last week to the appointment of Michele Bullock as the new Reserve Bank of Australia (RBA) Governor.

While copper had a slight pullback off the back of weaker than expected economic data from China, the base metal has managed to hold steady above US$3.8/lb as the time between now and worrying supply shortfalls draws closer. Refined copper consumption is expected to significantly accelerate in 2024 before a forecast copper supply shortfall that begins in 2025 is predicted to worsen every year for 10 years straight.

Markets remain relatively stable following the appointment of Michele Bullock as the new Reserve Bank of Australia (RBA) Governor, as investors await signs that the rate peak is near. The ASX has drifted up over the past week, stacking on over 3% of gains as resources led the way

Whether the change in central bank leadership brings a less hawkish approach to monetary tightening remains to be seen, but it does look like outgoing RBA Governor Philip Lowe has already done a lot of the heavy lifting.

Early this week financial markets were tipping just one more RBA rate rise, with cuts predicted to begin May next year.

Whether rates will rise at the next meeting, will come down to additional data on inflation, the global economy, the labour market and household spending, according to the RBA’s July board meeting minutes released yesterday. Talk of further rate rises sent jitters through real estate, energy stocks, and consumer firms, which were weighed down during yesterday’s trading.

In US markets overnight, the Dow Jones Industrial Average notched its seventh straight day of gains, and its longest winning streak since March 2021. Wall Street brushed aside mixed US economic data, buoyed by positive earnings from the major banks.

I recently sold my options trading business, Reach Trading. It has been rebranded to ‘Volatility’ and will be licenced by Point Capital. In light of this change, we have updated our Financial Services Guide (FSG), Privacy Policy and General Terms.

Meanwhile, leading fund managers continue to lean into ‘green and clean’ energy investments.

One fund manager who is garnering strong interest from the investor community for his award-winning fund-of-funds product is Anthony Murphy, Founder and CEO of Lucerne Investment Partners.

Anthony will be joining us this Friday, 21st July at 12pm (AEST) for The Insider: Meet the Fund Manager webcast where he will outline the wholesale Lucerne Select Alpha Fund (LSAF) and how it targets a return of 20% per annum over rolling 5-year periods. He will also discuss his three favourite companies of the moment, how he discovers under-the-radar investment ideas and Lucerne’s strategy to capitalise on the raging ‘green and clean’ energy sector.  Click here to book your spot.

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