Pete Wargent blogspot
Co-founder & CEO of AllenWargent property advisory, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.
4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.
"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.
"Pete Wargent is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.
"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.
"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.
"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.
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Saturday, 26 January 2013
Have markets mispriced interest rate cut odds?
The futures markets are pricing in a 37% chance of an interest rate cut on February 5th, down from 41% on Thursday.
Now I don't for a moment encourage gambling, but I think those odds are still priced too high.
Aussie dollar concerns have eased with its price to 104.18 cents. The iron ore spot has held up remarkably well at $148.60/tonne which is a world away from the panic stations we saw in the high $80 range. House prices seem to be ticking up which in itself must surely take a rate cut off the table for now. Unemployment even now is still under 5.5%.
Yes soft inflation leaves room for a cut - but the RBA must surely favour waiting for another month of data before pulling any interest rate triggers.
Absent any shocks in the next 10 days that is.
Granted if you go to a bookie they will chop an enormous chunk out of your winning margin but I still I think I will have a hypothetical $10 on rates being on hold at $1.23 today.
A hypothetical 23% tax free return on that punt.
If I'm wrong I'll donate a non-hypothetical extra $10 in my next donation the McGrath Foundation, can't say fairer than that!