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.

Macroeconomics

<ul><li>The RBA finds itself in a similar state of affairs as the last time it delivered stimulus in May 2015.  The Australian economy has continued to under-perform, with the income recession extending into its fourth consecutive year and growth expected to remain below trend for a while.  Many central banks have continued to ease policy in response to a deterioration in global growth expectations in the past year. </li><li>In its latest interest rate decision, the RBA maintained its easing bias, re-iterating that continued low inflation would offer the scope to ease policy to support demand, but added that the renewed appreciation of the Australian dollar was potentially compromising the necessary re-balancing of growth.  Market pricing of bonds and stocks points to a reduction in future expected growth and/or higher risk attached to future capital projects, which continues to undermine the central bank's efforts to boost animal spirits in the corporate sector and achieve a hand-over from mining to non-mining capex.</li><li>The RBA has delivered its last four interest rate cuts immediately following the release of tame inflation data.  The March quarter CPI print due for release on April 27th should confirm that underlying inflation remains at the bottom end of the central bank's target range.  Against this backdrop, Evidente expects the RBA Board to deliver a 25 basis point rate cut at its next meeting on May 3rd.</li></ul>

The RBA finds itself in a similar state of affairs as the last time it delivered stimulus in May 2015.  The Australian economy has continued to under-perform, with the income recession extending into its fourth consecutive year and growth expected to remain below trend for a while.  Many central banks have continued to ease policy in response to a deterioration in global growth expectations in the past year. In its latest interest rate decision, the RBA maintained its easing bias, re-iterating that continued low inflation would offer the scope to ease policy to support demand, but added that the renewed appreciation of the Australian dollar was potentially compromising the necessary re-balancing of growth.  Market pricing of bonds and stocks points to a reduction in future expected growth and/or higher risk attached to future capital projects, which continues to undermine the central bank's efforts to boost animal spirits in the corporate sector and achieve a hand-over from mining to non-mining capex.The RBA has delivered its last four interest rate cuts immediately following the release of tame inflation data.  The March quarter CPI print due for release on April 27th should confirm that underlying inflation remains at the bottom end of the central bank's target range.  Against this backdrop, Evidente expects the RBA Board to deliver a 25 basis point rate cut at its next meeting on May 3rd.

The RBA's Ground Hog Day