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

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Speaker 1: Alma and as always at this time on a Monday morning,

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Speaker 1: I'm joined by Conrass Stephen Cooculis. You'll find hear him

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Speaker 1: at the Cook dot com, t H e k O

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Speaker 1: UK dot com and on X using to handle the Cook. Stephen,

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Speaker 1: good morning.

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Speaker 2: Good morning. I'm all dressed up with somewhere to go.

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Speaker 2: What a week we've had? What a week coming up?

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Speaker 2: All the time?

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Speaker 1: Ah Man, we could talk about last week, the last

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Speaker 1: ten days, let's say so from sort of Friday week

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Speaker 1: ago through to the end of last week. Madness, Stephen, madness.

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Speaker 2: Where do we start? You know, we got the disappointing

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Speaker 2: news from the US jobs market, the unemployment rate ticking up,

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Speaker 2: employment a little less than expected, wages growth starting to

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Speaker 2: come down, chatter about, oh, the Fed's missed the boat.

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Speaker 2: They've made a mistake. Rounding it out that we had

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Speaker 2: to had the back of Japan hiking interest rates, which

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Speaker 2: sort of killed the carry trade. So that Monday last

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Speaker 2: week we had you know, stock markets crashing. Basically, the

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Speaker 2: Japanese market was down I think twelve percent I remember correctly,

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Speaker 2: and you know, US markets the tech side was down

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Speaker 2: four or five six percent intra day and overnight and

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Speaker 2: all the rest of it, and demands for urgent emergency

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Speaker 2: rate cuts from the Fed, and then through the week

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Speaker 2: it's settled down a bit. But then of course we

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Speaker 2: locally had our own Reserve Bank decision and Michelle Bullock

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Speaker 2: spoke a few times, and Sarah hunted the chief economists

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Speaker 2: that the banks gave a talk to. So I didn't

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Speaker 2: know where to start, where to end, and what to digest.

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Speaker 2: Is just so much on the Smagas board of information.

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Speaker 1: Well, where we stand on interest rates today after last

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Speaker 1: week's I mean, we had the forecast, we had this statement,

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Speaker 1: we had Michelle Bullock talking, where do we stand today?

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Speaker 2: Okay, taking that's a really good question because with that volatility,

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Speaker 2: we've gone from rate hikes being priced in to a

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Speaker 2: whole bunch of rate cuts being priced in to something

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Speaker 2: in between. So yeah, here and out, allowing for a

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Speaker 2: little volatility from the time of recording what not, Basically

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Speaker 2: in Australia, there is no chance of a raid hike

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Speaker 2: priced in. All we've got for the meeting on September

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Speaker 2: the twenty fourth, which is the next one for the

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Speaker 2: RBA and then through to their meeting in December about

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Speaker 2: a seventy percent chance of a twenty five basis point

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Speaker 2: raid cup. And that's despite not only at the RBA

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Speaker 2: announce from the press conference that the governor gave, but

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Speaker 2: Michelle Bullock spoke later in the week and said, look,

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Speaker 2: we they are a reserve bank arerly out ray cuts

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Speaker 2: and the only thing on our agenda is whether we

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Speaker 2: keep them steady or maybe if circumstances show that inflations

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Speaker 2: more stubborn than we thought, we might even put them up.

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Speaker 2: But the market sort of just well either ignored that

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Speaker 2: or got dominated by global events. As we said the

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Speaker 2: Japanese story, US week data, what's happening in the Eurozone.

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Speaker 2: China had some pretty so so data during the course

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Speaker 2: of last week too, So markets are sort of ignoring

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Speaker 2: the RBA and focusing on something else and are looking

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Speaker 2: for a high probability of a rate cut before Christmas.

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Speaker 2: Then even rates being on hold.

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Speaker 1: It's pretty remarkable. So this week we've got some pretty

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Speaker 1: important figures out, particularly around the labor market.

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Speaker 2: Oh, this week it's all about the labor market. Yeah,

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Speaker 2: we only get the wage price index every quarter, and

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Speaker 2: so tomorrow Tuesday, we get the June quarter wage price

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Speaker 2: index and the market's got a forecast of about a

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Speaker 2: zero point nine percent increase in wages in the June

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Speaker 2: quarter and that would actually bring the year on year

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Speaker 2: run rate down to four percent from a peak of

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Speaker 2: four point two percent. Now, like the inflation numbers on

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Speaker 2: a quarterly basis, the wage numbers, a point one difference

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Speaker 2: is quite big. It's quite a big deal because we've

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Speaker 2: got this, oh, I don't know, this nuanced debate in Australia.

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Speaker 2: If wages growth sort of four and a quarter percent

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Speaker 2: is probably too high. If it's four percent, it's probably

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Speaker 2: just okay. If it gets down to three and a

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Speaker 2: half percent, it's probably a little bit two weak. So

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Speaker 2: you know, that's why that number is going to be

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Speaker 2: so important. But if we look at the quarterly run

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Speaker 2: rate again, we've gone from one point to one too

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Speaker 2: point eight, and so we're looking for about a point

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Speaker 2: nine for this quarter. We've also got the jobs and

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Speaker 2: the unemployment number on Thursday. You know, the RBA has

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Speaker 2: got a dual mandate. Inflation clearly the well the one

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Speaker 2: that it's putting weight on. But it's course I've got

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Speaker 2: to have an eye on unemployment.

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Speaker 1: But does it does it? You know that statement after

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Speaker 1: the rate decision the other day, it made it really

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Speaker 1: clear inflation is a priority.

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Speaker 2: And someone pointed out on X coming b. It isn't

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Speaker 2: the minute, but someone pointed out on X in the statement.

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Speaker 2: So it's only about only eight hundred words the governor

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Speaker 2: puts out in a press release. There was inflation mentioned

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Speaker 2: twenty times, unemployment mentioned once, and I thought that Jim

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Speaker 2: Chalmers reforms had them with a roughly equalaiting with the

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Speaker 2: RBA at the moment just wants to get inflation down.

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Speaker 2: But Sean, this is the critical thing. If we get

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Speaker 2: another uptick in the unemployment rate like we saw in

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Speaker 2: the US ten days ago, if we get that four

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Speaker 2: point one game to four point two or four point three,

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Speaker 2: and who knows, the job adds numbers have been so weak,

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Speaker 2: then maybe our market will have a bit of a

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Speaker 2: digestive shock too, and the RBA might have to sort

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Speaker 2: of come out think a little bit more about their

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Speaker 2: dual mandate. I don't know, it's a fascinating time. We're

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Speaker 2: in this gray area of rates peaking maybe maybe coming down,

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Speaker 2: and the data will just tell us if and when

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Speaker 2: and what direction and how much monetary policy is going

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Speaker 2: to change.

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Speaker 1: Very interesting, Stephen, enjoy the week.

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Speaker 2: It'll be a beauty as always. Thanks Sean.

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Speaker 1: That was Econdo of Stephen Coacols, better known as the Koki.

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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 the Kirk. I'm

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Speaker 1: Sean Almer and this is fear and greed the weak

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Speaker 1: Ahead