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Speaker 1: Welcome to Fear and Greed the week Ahead. I'm Sean Almer,

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Speaker 1: and as always I'm joined by economist Stephen Coaculis. You'll

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Speaker 1: find him at the Cook dot com, t h e

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Speaker 1: k o uk dot com and on ex using the

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Speaker 1: handle the Kirk. Stephen, good morning.

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Speaker 2: Well, good morning. I've got a lot more gray hair

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Speaker 2: over the past week or ten days or so. What

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Speaker 2: a time we live in.

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Speaker 1: Wow, have you ever seen such I was going to

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Speaker 1: say policy backflipping, but you know, just such uncertainty around

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Speaker 1: economic policy.

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Speaker 2: Yeah, it's extraordinary. No, I've never seen anything quite like that.

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Speaker 2: And well, the announcements out of the Trump administration and

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Speaker 2: the retalit reaction from Chinese which is understandable. I don't

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Speaker 2: know if I necessarily agree with it, but I can

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Speaker 2: understand it. And then the market volatility, bond market late

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Speaker 2: last week was absolutely smashed. I think that more than

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Speaker 2: the stock market was the reason.

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Speaker 1: Why I was going to ask you about that, Stephen. Yeah,

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Speaker 1: it sort of shows that bond markets are king, the.

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Speaker 2: Bond market vigilantes, and we had that crazy time. Marty Wetton,

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Speaker 2: who's the interest rates strategist at Westpac, put out a

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Speaker 2: fantastic note last week and he's I think he's Australia's

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Speaker 2: best fixing interest person out there and just noted how

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Speaker 2: dysfunctional the US treasury bond market is. That's the safe

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Speaker 2: haven they were meant to be, the safe haven where

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Speaker 2: there's liquidity, where you can sort of at least park

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Speaker 2: your money and get it back. There was a real,

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Speaker 2: i don't know, a sand in the gearbox of the

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Speaker 2: bond market in the US late last week, and I

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Speaker 2: think that was the problem. And obviously that fed into

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Speaker 2: the equity market, which had those gyrations down and up

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Speaker 2: and all over the place. But it was really the

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Speaker 2: bond market that caused mister truptory because they've got big

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Speaker 2: budget deficits still, there's a lot of financing to do.

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Speaker 2: Governant issues bonds to fund their budget deficit and all

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Speaker 2: the rest of it. So they've got a real, real problem.

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Speaker 2: I don't know whether it's been resolved yet. Yeah.

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Speaker 1: I always think of the US bond market as kind

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Speaker 1: of the found of the global economic system, and that

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Speaker 1: has to be solid, because if that's not solid, you're

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Speaker 1: in all sorts.

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Speaker 2: Your spot on the US bond market, even though you

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Speaker 2: can you know, the yields go up and down, and

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Speaker 2: there's sort of implications for inflation and all these other things.

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Speaker 2: It was basically risk free in terms of your capital preservation.

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Speaker 2: Now you could be buffeted by these other things, as

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Speaker 2: I mentioned, But what we saw last week was just this,

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Speaker 2: I don't know, a real crack in that system. Of course,

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Speaker 2: when investors see that happening, overlay that with the policy

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Speaker 2: backwards forwards, forwards, backwards, all this other stuff. Yeah, people

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Speaker 2: too just took frive o.

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Speaker 1: Can it almost makes the local economy be boring? Can

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Speaker 1: I say that on? Never boring? Stephen? Never boring?

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Speaker 2: Come on, that's my lifeblood. But it's a bit like

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Speaker 2: a test match versus a T twenty cuicker game. Yeah,

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Speaker 2: there's different levels of excitement.

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Speaker 1: So we found out last week consumer sentiment was down

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Speaker 1: on the back of the tariff's. Business sentiment was not down,

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Speaker 1: but that was taken before the TARR announcement. Let's move

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Speaker 1: on this week. The big one this week really labor force.

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Speaker 2: Labor force, and this one is absolutely important. They're always important,

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Speaker 2: but this one's got a special place for us people

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Speaker 2: in the economics area because last month, you might recall,

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Speaker 2: we saw a shock surprise fall of about fifty three

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Speaker 2: thousand in employment in the month, something that no one

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Speaker 2: even thought was likely. Now we know that these monthly

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Speaker 2: numbers are volatile, They bounce around the abs to do

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Speaker 2: a survey, and there can be sampling eron all these

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Speaker 2: other things, so we really want to see whether that

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Speaker 2: was a bit of a signal that the labor market

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Speaker 2: is slowing or whether it's just this usual volatility. So

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Speaker 2: all of that said, the market is expecting it more

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Speaker 2: to be volatility rather than the signal of a deterioration

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Speaker 2: the labor market. So I think the consensus that I've

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Speaker 2: seen is a rebound of a round about sixty thousand

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Speaker 2: for employment. So you put a trend through that, so

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Speaker 2: it's weaker. So we've got slower employment growth looking at

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Speaker 2: the trend. But if we do get a number that's

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Speaker 2: much below plus thirty or plus forty thousand, so you've

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Speaker 2: got two months where the employment numbers are lower, and importantly,

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Speaker 2: the unemployment rates, which luckily held steady last month at

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Speaker 2: four point one, we had sort of again volatility in

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Speaker 2: the participation rate. So if that ticks up to four

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Speaker 2: point two or haven't bid four point three, then all

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Speaker 2: of a sudden, you've got a bit of a rethink

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Speaker 2: about that resilient economy in Australia that the governor IRBA

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Speaker 2: governor was talking about. That the tight labor market, that's

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Speaker 2: what we're going to be Judging from the labor force

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Speaker 2: release on Thursday, it.

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Speaker 1: Does seem that the tight labor market is the reason

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Speaker 1: that one of the key reasons the Reserve Bank is

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Speaker 1: just a bit reticent about doing anything on rates. And

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Speaker 1: we'll find out perhaps a little bit more on that

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Speaker 1: because the minutes are out this week from the board

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Speaker 1: meeting of a couple of weeks ago.

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Speaker 2: Indeed, from the one April meeting from the RBA Board.

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Speaker 2: The minutes come out and there the detailed, i don't know,

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Speaker 2: ten pages or so of lovely analysis of what the

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Speaker 2: board was thinking. Again, this is the first meeting of

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Speaker 2: the new Monetary Policy Board, so maybe there'll be a

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Speaker 2: bit more color in them on who said what, who

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Speaker 2: voted for different things. But that was the meeting. If

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Speaker 2: we recall, the governor when she gave her press conference

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Speaker 2: said there was not really a serious discussion of an

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Speaker 2: interest rate cut. They were worried, as you said, about

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Speaker 2: the tightness in the labor market, and they were still

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Speaker 2: had a bit of residual concern about whether inflation is

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Speaker 2: sustainably her word, in the target range. So the minutes

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Speaker 2: will give a bit more flesh on all of those ideas,

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Speaker 2: and of course we'll get a bit of validation on

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Speaker 2: that labor market issue, as we mentioned later in the week.

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Speaker 2: But yeah, I think watching more Donald Trump than the Look,

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Speaker 2: I'm afraid to say I wish it was now.

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Speaker 1: Yeah, but I mean those minutes, depending what they say,

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Speaker 1: obviously could well be so outdated just in two weeks

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Speaker 1: because of what's going on in the global market.

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Speaker 2: They yeah, look, that's the issue, and that's not the

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Speaker 2: rva's fault, because a lot's happened. But well, basically the

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Speaker 2: day after or two days after using the time change,

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Speaker 2: that's when Trump announced the Liberation Day whatever you call it,

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Speaker 2: and the tariffs backward and forward and back with you.

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Speaker 2: So the funny way, a lot has happened since then.

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Speaker 2: But nonetheless, that's the bedrock of what the RBA is

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Speaker 2: thinking at the moment, and obviously we overlay development since.

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Speaker 2: So yeah, we'll still still read the board minute. Sean,

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Speaker 2: don't get don't worry. We'll be looking at them very

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Speaker 2: very closely.

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Speaker 1: We'll be there exciting times. Thank you, Stephen, Thanks Sean.

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Speaker 1: That's Economys Stephen Cook curl Us, better known as the Kirk.

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Speaker 1: You can find him at the cook dot com and

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Speaker 1: follow him on X using the handle of the Kirk.

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Speaker 1: I'm Sean Aelmer and this is fear and greed weak

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Speaker 1: ahead