Via Martin North:
We ran the latest live Q&A session last night. One highlight was our updated scenarios. With the trade wars in play, the election results, RBA comments and APRA’s latest, the relative weighting for the scenarios have changed. Cash rates have been reduced, and bank losses adjusted.
Of course we have yet to get soundings from our household surveys as to whether buying intentions are changing; that will take a few weeks. And more unnatural acts might shift the results too.
Too bearish. It’s Scenario 2 now.
What they’re missing is that this is the thin end of the wedge. Both the RBA and APRA will keep cutting.
I don’t see any kind of boom. But prices will stabilise and grind higher until the next fiscal shock.
So yes, in the long term sense, it is dead cat bounce.