Perspectives: Episode 70 – The RBA’s Whatever It Takes Moment

<p class="MsoNormal"><span style= "font-size: 12pt; font-family: arial, helvetica, sans-serif;">In this episode, Escala Partners CIO, Tracey McNaughton, shares her views on the latest interest rate decision taken by the Reserve Bank of Australia. She also discusses the challenging earnings season facing the US and offers some insight into what she is hearing from Escala’s global fund managers on the ground.</span></p> <p class="MsoNormal"> </p> <p><span style= "font-size: 12pt; font-family: arial, helvetica, sans-serif;"><span lang="EN-GB" xml:lang="EN-GB">(0:49) - We have just had the announcement from the Reserve Bank that they have decided to lift interest rates for a 9^th consecutive time taking the official interest rate to 3.35%, the highest since September 2012.</span></span></p> <p class="MsoNormal"><span style= "font-size: 12pt; font-family: arial, helvetica, sans-serif;"><span lang="EN-GB" style="mso-ansi-language: EN-GB;" xml:lang="EN-GB">(3:11) - We had a strong start to the year with good performance in January across every major market - emerging and developed. How are you seeing this?</span></span></p> <p class="MsoNormal"><span style= "font-size: 12pt; font-family: arial, helvetica, sans-serif;"><span lang="EN-GB" style="mso-ansi-language: EN-GB;" xml:lang="EN-GB">(5:35) - Turning now to the US where interest rates were lifted again by the Federal Reserve for the 8th consecutive time. The view from the market is that we are almost done with this rate hike cycle.</span></span></p> <p class="MsoNormal"><span style= "font-size: 12pt; font-family: arial, helvetica, sans-serif;"><span lang="EN-GB" style="mso-ansi-language: EN-GB;" xml:lang="EN-GB">(8:07) - On the earnings front, it seems there is a clear loss of momentum compared to prior quarters.</span></span></p> <p class="MsoNormal"><span style= "font-size: 12pt; font-family: arial, helvetica, sans-serif;"><span lang="EN-GB" style="mso-ansi-language: EN-GB;" xml:lang="EN-GB">(11:38) - You have just completed “heat week” for international