Australia macro
PMIs
Today, the remaining PMIs were released. As expected, all are strong, indicating a firm expansion, albeit at a fractionally more modest pace than the prior month. This is to be expected, the data will continue to moderate, as COVID affects are normalised.
Building approvals
The very strong home lending data is flowing into the building approvals data, as expected. What’s good for banks is good for builders (generally) and good for discretionary retailers.
Whilst we view all 3 sectors as over-earning, there are pockets of value within the building materials space, companies like Adbri strike us as potentially interesting.
RBA
No change, as expected, from the RBA. The term funding facility won’t be extended (source of ultra low borrowing costs for banks), as expected. Little to see here. The RBA is on hold – however this won’t stop longer dated yields (e.g. 10+yrs) from rising, even as the front end of the curve is pinned down (out to the 3yr, and to a lesser extent, the 5yr).
Important Information: This document has been prepared by Aequitas Investment Partners ABN 92 644 165 266 (“Aequitas”, “our”, “we”), a Corporate Authorised Representative (no. 1284389) of C2 Financial Services, (Australian Financial Services Licensee no. 502171), and is for distribution within Australia to wholesale clients and financial advisers only.
This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.
Please note that past performance is not a reliable indicator of future performance.
General Advice Warning: This document has been prepared without taking into account your objectives, financial situation or needs, and therefore you should consider its appropriateness, having regard to your objectives, financial situation and needs. Before making any decision about whether to acquire a financial product, you should obtain and read the relevant Product Disclosure Statement (PDS) or Investor Directed Portfolio Service Guide (IDPS Guide) and consider talking to a financial adviser.
Taxation warning: Any taxation considerations are general and based on present taxation laws and may be subject to change. Aequitas is not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and investors should seek tax advice from a registered tax agent or a registered tax (financial) adviser if they intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.