Don’t fight the Fed… or the ECB or RBA
The ECB and the Fed now clearly look to be heading towards monetary easing, probably from July.
We expect two rate cuts this year from the Fed.
The shift back towards monetary easing by global central banks against a backdrop of low inflation adds to confidence that global growth will pick up again over the next six months or so and this will all support share markets on a six to 12-month horizon.
We still see the RBA easing more than the Fed given the weaker state of the Australian economy and so, on balance, continue to see the $A falling to around $US0.65 by year end.