1 00:00:05,280 --> 00:00:07,680 Speaker 1: Welcome to Fear and Greed the week ahead. I'm sure, alma, 2 00:00:07,800 --> 00:00:10,880 Speaker 1: and as always I'm joined by economist Stephen Caculis. You'll 3 00:00:10,880 --> 00:00:13,320 Speaker 1: find team at the Cook dot com and on x 4 00:00:13,560 --> 00:00:17,480 Speaker 1: using the handle the Cook tgk a UK. Stephen, Good morning, 5 00:00:17,960 --> 00:00:20,360 Speaker 1: cracking week. We've had cracking week. We're going to have. 6 00:00:21,040 --> 00:00:24,320 Speaker 2: It's all happening. Last week was huge, the inflation numbers, 7 00:00:24,360 --> 00:00:27,240 Speaker 2: plus a whole lot of activity indicators this week in 8 00:00:27,280 --> 00:00:31,480 Speaker 2: addition to the Melbourne Cup, we've got Central bank meetings, 9 00:00:31,600 --> 00:00:34,960 Speaker 2: We've got discussions on interest rates. It's all happening. 10 00:00:35,000 --> 00:00:37,720 Speaker 1: As they say, right, let's get last week out of 11 00:00:37,720 --> 00:00:39,559 Speaker 1: the way. What did you make of it? Once we 12 00:00:39,640 --> 00:00:42,639 Speaker 1: got those inflation figures, we also had building approvals which 13 00:00:42,720 --> 00:00:46,680 Speaker 1: ticked up, retail trade house prices. What did you make 14 00:00:46,720 --> 00:00:47,120 Speaker 1: of it all? 15 00:00:47,479 --> 00:00:50,080 Speaker 2: I did a little jeek when I saw the inflation 16 00:00:50,200 --> 00:00:52,600 Speaker 2: numbers because I've been hoping and I wish it and 17 00:00:52,640 --> 00:00:55,440 Speaker 2: a praying for those inflation numbers to come down. And 18 00:00:55,560 --> 00:00:58,520 Speaker 2: while there is a hearty debate going on about trimmed 19 00:00:58,520 --> 00:01:02,840 Speaker 2: mean inflation versus headline inflation, versus services inflation, on all 20 00:01:02,880 --> 00:01:06,880 Speaker 2: of the above, it's good to see inflation tracking lower. 21 00:01:06,959 --> 00:01:10,240 Speaker 2: So just to recap, the quarterly figures confirmed that headline 22 00:01:10,240 --> 00:01:12,440 Speaker 2: inflation at two point eight percent in the two to 23 00:01:12,520 --> 00:01:16,720 Speaker 2: three target range. The monthly figures are even lower. And yes, 24 00:01:16,760 --> 00:01:19,680 Speaker 2: to be sure, a lot of it was driven by 25 00:01:19,720 --> 00:01:23,600 Speaker 2: the subsidies that the federal government paid on electricity, some 26 00:01:23,720 --> 00:01:27,119 Speaker 2: state government's paid on electricity, public transport faars and these 27 00:01:27,160 --> 00:01:30,800 Speaker 2: sorts of things. So there are a few one off 28 00:01:31,360 --> 00:01:34,959 Speaker 2: things that will probably end later rather than sooner, so 29 00:01:35,040 --> 00:01:36,880 Speaker 2: maybe we should be discouning them a little bit. But 30 00:01:37,959 --> 00:01:39,840 Speaker 2: even if you discount then and other things that are 31 00:01:39,880 --> 00:01:43,400 Speaker 2: driven by government policy, tobacco prices went up thirteen percent, 32 00:01:43,560 --> 00:01:46,360 Speaker 2: and you've got school fees and these sorts of things 33 00:01:46,400 --> 00:01:48,760 Speaker 2: which are outside the realm of the RBA. If you 34 00:01:48,760 --> 00:01:54,120 Speaker 2: look at underlying inflation, core core inflation, it's probably pretty 35 00:01:54,160 --> 00:01:56,840 Speaker 2: low as well. And I think that's what the RBA 36 00:01:56,920 --> 00:02:00,960 Speaker 2: will be considering when they meet tomorrow, because Okay, yes 37 00:02:01,000 --> 00:02:04,080 Speaker 2: we know the electricity prices are huge, but there's other 38 00:02:04,120 --> 00:02:08,000 Speaker 2: things that probably overstate how high that trend made inflation 39 00:02:08,080 --> 00:02:08,480 Speaker 2: eight is. 40 00:02:08,840 --> 00:02:11,000 Speaker 1: Yeah, I mean, just quickly, the building approval, the figures 41 00:02:11,000 --> 00:02:15,240 Speaker 1: of retail train, how do they fit into the equation. 42 00:02:15,440 --> 00:02:18,160 Speaker 2: Yeah, look, they were sort of pretty neutral. I think 43 00:02:18,160 --> 00:02:20,480 Speaker 2: it's fair to say retail sales ticked up a little 44 00:02:20,520 --> 00:02:23,640 Speaker 2: bit in September, the month of September, and that's after 45 00:02:24,120 --> 00:02:27,160 Speaker 2: a decent sort of rise in August when the tax 46 00:02:27,200 --> 00:02:29,240 Speaker 2: cuts were paid. Don't forget we all got tax cuts 47 00:02:29,240 --> 00:02:32,160 Speaker 2: on the first and some of these subsidies sort of 48 00:02:32,240 --> 00:02:35,519 Speaker 2: kicked into our savings accounts as well. So that's one 49 00:02:35,560 --> 00:02:39,040 Speaker 2: reason why retail sales have probably stopped bleeding. In the fact, 50 00:02:39,040 --> 00:02:42,320 Speaker 2: in real terms, volume terms, in the September quarter, retail 51 00:02:42,360 --> 00:02:45,079 Speaker 2: sales were up half the said. So again, nice to 52 00:02:45,120 --> 00:02:47,040 Speaker 2: have a plus sign on that. There haven't been many 53 00:02:47,040 --> 00:02:49,799 Speaker 2: of them on consumer spending in the last couple of years, 54 00:02:49,800 --> 00:02:52,800 Speaker 2: but again not that blow away strong number, and there 55 00:02:52,919 --> 00:02:55,640 Speaker 2: rose for an obvious reason, so we'll see whether that continues. 56 00:02:55,880 --> 00:02:58,840 Speaker 2: Building approvals, Sean, Yes, you and I be chatting for 57 00:02:58,840 --> 00:03:03,400 Speaker 2: a while now about the urgent need to build more houses, 58 00:03:03,680 --> 00:03:08,160 Speaker 2: this rental problem, house price affordability, and do you know what, 59 00:03:08,600 --> 00:03:11,840 Speaker 2: last week we saw building approvals numbers up four point 60 00:03:11,880 --> 00:03:14,880 Speaker 2: four percent of the month, and in trend terms, because 61 00:03:14,919 --> 00:03:17,880 Speaker 2: monthly they're volatile. On sees me, just the basis in 62 00:03:17,960 --> 00:03:22,680 Speaker 2: trend terms, they're up for seven straight months, up thirteen 63 00:03:22,720 --> 00:03:25,880 Speaker 2: percent from the low point. So is this the building 64 00:03:26,440 --> 00:03:30,160 Speaker 2: we had to have, we had to supply to ensure 65 00:03:30,160 --> 00:03:32,720 Speaker 2: that we can sort of correct these imbalances on housing. 66 00:03:32,760 --> 00:03:34,720 Speaker 2: So that actually caused me to have a little gig 67 00:03:34,720 --> 00:03:35,560 Speaker 2: in my step as well. 68 00:03:35,960 --> 00:03:38,640 Speaker 1: Fantastic. So you put all that together, you're sitting in 69 00:03:38,680 --> 00:03:41,280 Speaker 1: there having a scone with the Reserve Bank Board. What 70 00:03:41,280 --> 00:03:43,440 Speaker 1: are you going to be talking about? Is there any chance? 71 00:03:43,520 --> 00:03:45,080 Speaker 1: I mean, we had Andrew Howser a couple of weeks 72 00:03:45,080 --> 00:03:46,600 Speaker 1: ago saying, I don't know whether were they going to 73 00:03:46,640 --> 00:03:48,440 Speaker 1: go up or down? Just don't know. Is there any 74 00:03:48,480 --> 00:03:50,240 Speaker 1: chance they're going to be a bit nice and say, look, 75 00:03:50,560 --> 00:03:52,760 Speaker 1: most likely the next move is down or not. 76 00:03:53,320 --> 00:03:55,800 Speaker 2: I think there's enough in the numbers that have come 77 00:03:55,840 --> 00:04:00,560 Speaker 2: out now, and this is including that blockbuster labor force 78 00:04:00,840 --> 00:04:03,360 Speaker 2: saw a couple of weeks ago which confirmed unemployment taking 79 00:04:03,400 --> 00:04:05,760 Speaker 2: back down to four point one percent. But I think 80 00:04:05,760 --> 00:04:09,240 Speaker 2: there's enough in the inflation numbers, whether they're the underlying 81 00:04:09,320 --> 00:04:13,040 Speaker 2: or the headline figures. There's enough in the activity, retail sales, 82 00:04:13,080 --> 00:04:16,120 Speaker 2: building approvals and that exports these sorts of things, and 83 00:04:16,360 --> 00:04:18,360 Speaker 2: what's happening globally for them to say, yeah, look, we 84 00:04:18,920 --> 00:04:22,880 Speaker 2: can effectively rule out a rate hike, but those of 85 00:04:22,960 --> 00:04:25,600 Speaker 2: us myself include getting a little bit excited about an 86 00:04:25,640 --> 00:04:29,479 Speaker 2: imminent interst rate cut consisted of call their jets for 87 00:04:29,520 --> 00:04:32,159 Speaker 2: a few more months. We do want to see further 88 00:04:32,200 --> 00:04:34,960 Speaker 2: confirmation on all of the above. You know, the activity 89 00:04:35,040 --> 00:04:37,960 Speaker 2: numbers not recovering. We want to see. We don't want 90 00:04:37,960 --> 00:04:39,560 Speaker 2: to see our employment going up, but we're waiting for 91 00:04:39,600 --> 00:04:41,920 Speaker 2: that to happen. And if the next even the next 92 00:04:41,920 --> 00:04:46,400 Speaker 2: couple of monthly inflation indicators confirmed that inflation's probably tracking 93 00:04:46,960 --> 00:04:50,720 Speaker 2: within that two to three bad then we can cut interstrates. 94 00:04:50,880 --> 00:04:53,880 Speaker 2: That's what's happening globally and we're going to be part 95 00:04:53,920 --> 00:04:55,600 Speaker 2: of that part. It's just a matter of when. 96 00:04:55,839 --> 00:04:58,560 Speaker 1: Some good news. What about the election obviously the US election, 97 00:04:58,640 --> 00:05:01,200 Speaker 1: we've been talking about that. Then we also had the 98 00:05:01,240 --> 00:05:05,680 Speaker 1: FED Federal Reserve IMC meeting this week, we have the 99 00:05:05,680 --> 00:05:08,600 Speaker 1: Bank of England this week. What about all those international factors, 100 00:05:08,920 --> 00:05:10,880 Speaker 1: Why are things going to happen and how much does 101 00:05:10,920 --> 00:05:12,080 Speaker 1: it matter to the Reserve Bank. 102 00:05:12,480 --> 00:05:15,600 Speaker 2: Look, they're arguably going to be bigger than what the 103 00:05:15,640 --> 00:05:17,560 Speaker 2: Reserve Bank's going to be doing that, you know, if 104 00:05:17,600 --> 00:05:21,720 Speaker 2: the Fed does something unusual on interestrate's now twenty five 105 00:05:21,800 --> 00:05:25,159 Speaker 2: point cuts basically priced in for later this week after 106 00:05:25,240 --> 00:05:28,520 Speaker 2: the US election, So we'll get sort of information from 107 00:05:28,560 --> 00:05:31,000 Speaker 2: the Fed about what they've done a twenty five point 108 00:05:31,040 --> 00:05:33,960 Speaker 2: cut and importantly what they're doing. So Jerome Powell, the 109 00:05:34,040 --> 00:05:36,919 Speaker 2: chairperson of the Federal Reserve does press conference, is going 110 00:05:36,960 --> 00:05:39,000 Speaker 2: to be grilled on all of the above, and by 111 00:05:39,080 --> 00:05:42,960 Speaker 2: them we'll probably know the US election result and oh gosh, 112 00:05:43,040 --> 00:05:45,760 Speaker 2: and it looks to be pretty close. I don't know 113 00:05:45,800 --> 00:05:48,080 Speaker 2: which way the voters in the US are going to go, 114 00:05:48,320 --> 00:05:51,799 Speaker 2: but I think it's fair to say that whatever the result, 115 00:05:51,920 --> 00:05:54,320 Speaker 2: almost is going to be a bit of what do 116 00:05:54,360 --> 00:05:57,800 Speaker 2: we call it volatility in markets, volatility and economics. We 117 00:05:57,960 --> 00:06:01,760 Speaker 2: see what the new administration tax on the budget, which 118 00:06:01,839 --> 00:06:04,360 Speaker 2: is still that well, did I say it? A sleeper 119 00:06:04,440 --> 00:06:08,720 Speaker 2: issue that's sort of underlying some of the undercurrents in 120 00:06:08,760 --> 00:06:10,920 Speaker 2: the bond market in recent months that how big is 121 00:06:10,960 --> 00:06:13,039 Speaker 2: that US budget? Empis going to be in government debt. 122 00:06:13,440 --> 00:06:16,360 Speaker 2: So who wins the election could well be that other 123 00:06:16,480 --> 00:06:22,240 Speaker 2: factor that sort of creates market volatility, but also economic qualitility. 124 00:06:21,720 --> 00:06:24,159 Speaker 1: With that and Beg of England, will they do anything, 125 00:06:24,720 --> 00:06:25,320 Speaker 1: Begg of England. 126 00:06:25,960 --> 00:06:28,480 Speaker 2: Look, they're probably going to cut. They've had some better 127 00:06:28,600 --> 00:06:30,960 Speaker 2: numbers in the UK just in the last few weeks. 128 00:06:32,120 --> 00:06:34,760 Speaker 2: The GENP result was a touch better, some of the 129 00:06:35,080 --> 00:06:37,800 Speaker 2: labor market numbers were a touch better. Inflation is nice 130 00:06:37,839 --> 00:06:40,080 Speaker 2: and low, so that's why there's probably going to be 131 00:06:40,120 --> 00:06:41,960 Speaker 2: a twenty five point cup. But we know a couple 132 00:06:42,000 --> 00:06:44,560 Speaker 2: of the people on the Monetary Policy Committee of the 133 00:06:44,640 --> 00:06:47,440 Speaker 2: Bank of England that people who vote on whether the 134 00:06:47,560 --> 00:06:50,200 Speaker 2: rates should go up or down or unchanged sort of 135 00:06:50,240 --> 00:06:53,320 Speaker 2: a bit nervous about cutting too much too early, like 136 00:06:53,440 --> 00:06:56,960 Speaker 2: our RBA friends. So it's probably going to be a cut, 137 00:06:57,040 --> 00:06:59,720 Speaker 2: But there's still this little bit of hedging there in 138 00:06:59,720 --> 00:07:01,800 Speaker 2: the mark so that they might not go They might 139 00:07:01,880 --> 00:07:03,279 Speaker 2: just leave them steady for this meeting. 140 00:07:03,800 --> 00:07:06,160 Speaker 1: I got to say the budget from the UK Chancellor 141 00:07:06,240 --> 00:07:11,760 Speaker 1: last week, which was incredibly tough. Maybe she's doing all 142 00:07:11,800 --> 00:07:15,040 Speaker 1: the work for Montree policy guys, that finally fiscal policy 143 00:07:15,080 --> 00:07:17,680 Speaker 1: at least in that country is helping keep a lot 144 00:07:17,760 --> 00:07:18,239 Speaker 1: of inflation. 145 00:07:18,600 --> 00:07:20,160 Speaker 2: Yeah, there's a bit of a lesson there for the US. 146 00:07:20,200 --> 00:07:23,120 Speaker 2: Who everyone's there that Okay, nobody likes to pay more tax. 147 00:07:23,200 --> 00:07:25,560 Speaker 2: Nobody likes to have services cut, Nobody likes to have 148 00:07:25,680 --> 00:07:28,840 Speaker 2: their some of their personal benefit payments reduced. But that's 149 00:07:28,880 --> 00:07:32,040 Speaker 2: what the new administration in the UK did. Yes, the 150 00:07:32,080 --> 00:07:36,080 Speaker 2: budget was a corker. The tax take to GDB the skyrocketing, 151 00:07:36,160 --> 00:07:40,760 Speaker 2: there's cracking down on tax minimization schemes, our hiking taxes. 152 00:07:41,960 --> 00:07:45,680 Speaker 2: It was the true austerity budget. But that's the thing 153 00:07:45,760 --> 00:07:48,640 Speaker 2: that this might trigger the majority of the Bank of 154 00:07:48,720 --> 00:07:51,240 Speaker 2: England Committee to sort of well, if the government's been 155 00:07:51,280 --> 00:07:54,040 Speaker 2: tough on budget policy, if they're sucking out this was 156 00:07:54,160 --> 00:07:55,880 Speaker 2: forty billion pounds I think it is, which is a 157 00:07:56,280 --> 00:07:59,040 Speaker 2: big number, then perhaps we can afford to trim rates 158 00:07:59,080 --> 00:08:03,040 Speaker 2: without really really risking and overheating of the economy. So 159 00:08:04,400 --> 00:08:07,720 Speaker 2: as always, so many moving parts in economics and money 160 00:08:07,800 --> 00:08:09,280 Speaker 2: markets and financial markets. 161 00:08:09,640 --> 00:08:11,680 Speaker 1: And I haven't even got your tip yet. I mean, 162 00:08:11,960 --> 00:08:14,120 Speaker 1: this is all okay, but what about the Melbourne Cup? 163 00:08:14,160 --> 00:08:15,480 Speaker 1: Have you got a tip from the Melbourne Cup? 164 00:08:15,520 --> 00:08:17,200 Speaker 2: Look, I've had a look at the form and over 165 00:08:17,240 --> 00:08:19,200 Speaker 2: the weekend there are a couple of things that just 166 00:08:19,240 --> 00:08:21,640 Speaker 2: sort of made me think about it. VI, Sustina's not 167 00:08:21,720 --> 00:08:25,360 Speaker 2: running the Bruder winner of the Cops plate, the weekend 168 00:08:25,400 --> 00:08:27,880 Speaker 2: before last. But we've had this sort of incredible form. 169 00:08:28,400 --> 00:08:31,000 Speaker 2: I like the map. That's the name of the horse, 170 00:08:31,160 --> 00:08:36,080 Speaker 2: the mat. It's around about twenty six dollars round about 171 00:08:36,120 --> 00:08:38,640 Speaker 2: thirty one dollars in the in between that range. I'm 172 00:08:38,640 --> 00:08:40,760 Speaker 2: going to have a couple of shekels each way on 173 00:08:40,840 --> 00:08:41,440 Speaker 2: that one on. 174 00:08:41,559 --> 00:08:45,400 Speaker 1: The map, right, my two, so myself here first the map. 175 00:08:45,640 --> 00:08:46,320 Speaker 1: Enjoy your week. 176 00:08:46,480 --> 00:08:46,880 Speaker 2: Thanks youall. 177 00:08:47,320 --> 00:08:49,800 Speaker 1: A's economist Stephen Cocoles, better known as the Kok. You 178 00:08:49,840 --> 00:08:51,599 Speaker 1: can find hear him at the cook dot com and 179 00:08:51,720 --> 00:08:54,440 Speaker 1: follow him on x using the handle the Cook. I'm 180 00:08:54,440 --> 00:08:56,600 Speaker 1: sure all this is here and greed the week ahead.