Aus macro/job ads/SEEK/SEK

The job ads index continues to roll over, down a little over 4% for April.

To the degree it matches/correlates to unemployment, we could already be deep in the “overshooting to the downside” range (note that we have inverted the SEEK index, so its relationship to the unemployment rate can be seen more easily to the eye).

Given Aussie government bonds yield quite a bit over 4%, we think this adds a nice degree of “portfolio insurance”.

Whilst inflation has been stickier than we’d imagined, historically speaking, adding duration at these levels has historically worked out well, and, it is difficult to imagine inflation remaining above target given a) it’s moving towards target in many other geographies, including those that are running larger fiscal deficits b) the more effective than normal transmission mechanism of monetary policy here in Australia due to the preponderance of variable rate mortgages and high levels of household debt.

And, at the very least, it holds us back from getting excited about Seek, the employment company!

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