BlackRock positioned on rates
While many may have been surprised by the Reserve Bank of Australia's (RBA's) decision to cut the official cash rate by 25bps to 2.75 per cent last week, Steve Miller, head of fixed income for BlackRock said that in his view there had been a greater prospect of a cut and that BlackRock had positioned its portfolios accordingly.
"That view was based on an assessment that activity growth was running a little below trend and that as yet there was little sign that growth leadership was transitioning from mining investment to non-mining investment and household spending, along the lines that the RBA had been hoping for," he said.
"The RBA had noted previously that it did ‘have scope to cut if needed.'"
Miller said that the case for further additional easing had grown recently due to softer domestic and international data, a strong Australian dollar despite falling commodity prices and weakness in the Federal Government's fiscal position due to declining nominal income growth.
"There is no strong forward guidance but it is worth noting that the RBA decided to use ‘some' of the scope for lower rates that was afforded by quiescent inflation," he said.
"I suspect there remains a very soft easing bias.
"In my assessment, it is investment outside of the resources sector that is the key concern," Miller continued.
"Were that to continue to languish and were inflation to remain subdued, further rate cuts in 2013 are likely."
"We also remain somewhat concerned about recent softer growth in China."
Recommended for you
The winners have been announced for the 2025 Super Fund of the Year Awards, held in Melbourne on 26 November by Money Management's sister brand Super Review.
Data and technology provider Novigi has acquired Iress’ superannuation consulting and managed services business from Apex Group.
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
