RBA sweating with iron ore entering a technical bear market - Rabobank
|Michael Every, Head of FMR at Rabobank, explains that the RBA will be sweating with iron ore entering a technical bear market as speculators step back for now; and there’s a long way down from here if any further policy changes are seen in China.
Key Quotes
“That’s on top of the worries the Bank has over the housing bubble it’s allowed to blow, which removes much of its flexibility on rates - as the market is now discussing in an ever-louder voice. And let’s not forget the Aussie government is doing all it can to hurt by pressing ahead with plans to run a pointless fiscal surplus, as if it were their job to suck liquidity out of the economy. Combining the latter two threats, Australia’s biggest bricks supplier has just publicly warned the government about tinkering with the Holy Grail of negative gearing or capital gains taxes to try to deal with the current bubble and revenue issues, arguing it would trigger a “fast fall” in the market. That’s what bubbles do, of course; but then again, he just wants to sell bricks like Aussies just want to buy rugs.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.