ECONOMIC FORECASTING

Pimco forecasts slow year but no recession

roymorgansocial Leave a comment

Original article by Vanessa Desloires
The Australian Financial Review – Page: 28 : 5-Feb-16

Mihir Worah and Geraldine Sundstrom of Pimco believe that the seven-year bull run is over and volatility will be a characteristic of financial markets in 2016. They also warn that investors can expect a period of lower returns, while the crude oil price is forecast to reach $US50 per barrel by the end of the year. Meanwhile, Pimco forecasts that the global inflation rate will rise to between 1.75 per cent and 2.25 per cent, although it has downplayed the prospect of a recession.

CORPORATES
PACIFIC INVESTMENT MANAGEMENT COMPANY LLC, UNITED STATES. FEDERAL RESERVE BOARD

RBA needs to cut official interest rate to 1.5pc: ANZ

roymorgansocial Leave a comment

Original article by Jacob Greber
The Australian Financial Review – Page: 3 : 25-Sep-15

The ANZ Bank says Australia’s unemployment rate of 6.2 per cent is unlikely to fall significantly in the near-term due to factors such as slowing global economic growth and the uncertain outlook for the Chinese economy. Chief economist Warren Hogan warns that the unemployment rate could potentially rise over the next year or so. ANZ believes that a combination of factors means the Reserve Bank will have to reduce the cash rate in both February and May 2016.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY

Citi tips weak recovery in resources for rest of year

roymorgansocial Leave a comment

Original article by Vanessa Desloires
The Australian Financial Review – Page: 35 : 24-Sep-15

Citigroup notes that market-traded commodities have delivered flat returns at best during the September 2015 quarter. The firm expects only a modest improvement in commodity prices in the fourth quarter, saying prices will be affected by factors such as the uncertain economic outlook in China and excess supply. Citigroup is also bearish about the outlook for the global economy, and now forecasts growth of 2.7 per cent in 2015 and 3.1 per cent in 2016.

CORPORATES
CITIGROUP INCORPORATED, UNITED STATES. FEDERAL RESERVE BOARD, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES

Citi says 55pc chance of global recession

roymorgansocial Leave a comment

Original article by Karen Maley
The Australian Financial Review – Page: 22 : 11-Sep-15

A new report from Citigroup’s chief economist Willem Buiter has raised the prospect of an emerging market-driven global recession. Buiter rates the chances of a global recession in the next two years at 55 per cent, warning that if the Chinese economy goes into recession it will have a flow-on effect on other emerging market economies. He adds that the limited scope for further interest rate cuts in developed economies may require central banks to consider more stimulus measures.

CORPORATES
CITIGROUP INCORPORATED

BHP’s Mackenzie says China has ‘bottomed’

roymorgansocial Leave a comment

Original article by James Chessell, Amanda Saunders
The Australian Financial Review – Page: 17 : 27-Aug-15

BHP Billiton CEO Andrew Mackenzie has played down fears about China’s economy, claiming it was showing signs of recovery. He agreed with Apple CEO Tim Cook that there was still solid demand in China. Mackenzie forecast its second half financial year would be better than the first. BHP posted a 51 per cent fall in underlying annual profit to $US6.4 billion ($A8.9 billion) because of a slump in commodity prices.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, APPLE INCORPORATED, GLENCORE AUSTRALIA PTY LTD

Oil’s era of $US100 a barrel is over

roymorgansocial Leave a comment

Original article by Stephen Cauchi
The Australian Financial Review – Page: 25 : 3-Dec-14

The price of Brent crude oil fell by 0.5 per cent to about $US72 per barrel on 2 December 2014, compared with a year-to-date high of $US112 in June. Citigroup has warned that the oil price is unlikely to rise above the $US100 level in the long-term. The firm suggests that global economic growth would be boosted by an average of 0.08 per cent over the next four years if the oil price falls by a further $US10 per barrel

CORPORATES
CITIGROUP PTY LTD, WOODSIDE PETROLEUM LIMITED – ASX WPL, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES

Aussie ‘will hit US76c’

roymorgansocial Leave a comment

Original article by Anthony Macdonald
The Australian Financial Review – Page: 27 : 14-Nov-14

Geoffrey Kendick of Morgan Stanley is bearish about the outlook for the Australian dollar, forecasting that it will end 2014 at $US0.85. Kendrick expects the currency to be trading at just $US0.76 at the end of 2015. He also believes that there is the potential for global deflation, and he does not expect the Reserve Bank to increase official interest rates before its US counterpart does so

CORPORATES
MORGAN STANLEY AND COMPANY INCORPORATED, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD

Fears of GFC-style complacency

roymorgansocial Leave a comment

Original article by Richard Gluyas, Michael Bennet, Annabel Hepworth
The Australian – Page: 20 : 23-Sep-14

An Australian fund manager has raised concerns about the state of financial markets. Dion Hershan, of Goldman Sachs Asset Management, said that markets are becoming similar to markets in 2006 before the global financial crisis. He said that credit spreads are tight, companies are using financial engineering and many have high growth and valuation expectations. Hershan said that rising global interest rates and declining commodity prices have made investors worried about a correction

CORPORATES
GOLDMAN SACHS ASSET MANAGEMENT, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, STANDARD AND POOR’S ASX 200 INDEX, RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, UBS HOLDINGS PTY LTD, GROUP OF TWENTY (G-20), AUSTRALIAN BANKERS’ ASSOCIATION