Founder Evidente. Top rated quantitative analyst, Evidente

Sam Ferraro

Founder Evidente. Top rated quantitative analyst

Evidente

Evidente is an independent financial education firm that delivers innovative financial advice to wholesale investors, including active long only funds, hedge funds, pension funds, and sovereign wealth funds, in Australia and globally.  Drawing on academic research in asset pricing, behavioural finance and portfolio construction, Evidente provides wholesale investors with commercial solutions to stock selection and asset allocation decisions across equities and other asset classes.

Thematic (Sector/Industry)

Australia Financials / Thematic (Sector/Industry)

<p>More policy easing appears to be imminent.&nbsp; Interbank futures suggest there is a 70% probability of a 25 basis point rate cut at today's RBA Board&nbsp;meeting, while the overwhelming majority of market economists expect the RBA to ease policy today.&nbsp; It is telling that In the latest monetary policy minutes from April, the RBA acknowledges that labour market conditions are likely to remain subdued and that the economy is expected to operate with a degree of spare capacity for some time.&nbsp; The more serious policy error at this juncture thus appears to be keeping policy unchanged.&nbsp; Against this backdrop, market participants will need to become accustomed to more noise from the RBA and APRA about the use of macro-prudential to contain risks stemming from housing.&nbsp; In the likely event that the central bank cuts the Overnight Cash Rate today to 2%, investors' focus will inevitably shift to what next?&nbsp; Due the RBA's concerns about housing, I expect that the policy rate will remain on hold for the remainder of the year. &nbsp;The statement accompanying today's decision will therefore likely quell expectations of another rate cut in the near term, which will provide some support to the Australian dollar.</p>

More policy easing appears to be imminent.&nbsp; Interbank futures suggest there is a 70% probability of a 25 basis point rate cut at today's RBA Board&nbsp;meeting, while the overwhelming majority of market economists expect the RBA to ease policy today.&nbsp; It is telling that In the latest monetary policy minutes from April, the RBA acknowledges that labour market conditions are likely to remain subdued and that the economy is expected to operate with a degree of spare capacity for some time.&nbsp; The more serious policy error at this juncture thus appears to be keeping policy unchanged.&nbsp; Against this backdrop, market participants will need to become accustomed to more noise from the RBA and APRA about the use of macro-prudential to contain risks stemming from housing.&nbsp; In the likely event that the central bank cuts the Overnight Cash Rate today to 2%, investors' focus will inevitably shift to what next?&nbsp; Due the RBA's concerns about housing, I expect that the policy rate will remain on hold for the remainder of the year. &nbsp;The statement accompanying today's decision will therefore likely quell expectations of another rate cut in the near term, which will provide some support to the Australian dollar.

Rate cut today, but what of tomorrow?