Step back and just breathe

Delivered on By Justin Pyvis

Good morning! Opposition leader Anthony Albanese delivered yet another gaffe yesterday, unable to name the six points of Labor’s plan for the National Disability Insurance Scheme (NDIS) until “he was handed the policy plan by an adviser” a few minutes later.

‘Albo’ also refused to list his party’s five-point plan for aged care when requested, which after not knowing the unemployment or cash rate brings his brain fades to a total of three in less than four weeks of campaigning – one of which he spent at home with COVID!

Not a good look for someone who wishes to be PM – perhaps it’s time to find an excuse to check back into COVID-iso to limit any further damage?

Have a great weekend.

Reading the tea leaves

Daily % change







AU Bond



US Bond









Brent (bbl)



Gold (oz)



Iron ore (t)









Note: Brent oil, gold bullion and iron ore prices are the second futures contract. Bond yields are 10-year Treasuries.

Well that didn’t last long. A day after rallying the most since May 2020 the US S&P500 fell -3.56%, its biggest drop since Friday’s bloodbath, which was itself the largest fall since June 2020. Bond yields soared and tech stocks were hammered, with all of the gang formerly known as the FAANGs falling over -5%.

Locally, the ASX200 gained 0.82% as all 11 sectors barring financials (-0.02%) finished in the black after a solid US lead the night before on dovish comments from the US Federal Reserve.

Food for thought

RBNZ: Badly mis-forecast economic conditions, claimed inflation was transitory, reacted too slowly, but don't worry... "we have got this"!
RBNZ: Badly mis-forecast economic conditions, claimed inflation was transitory, reacted too slowly, but don't worry... "we have got this"! Source

“Step back and just breathe.”

Those were the words uttered by Reserve Bank of New Zealand (RBNZ) governor Adrian Orr yesterday, “who was in unapologetic and robust form” as he testified to the NZ Parliament’s Finance and Expenditure select committee:

“Given the nature and scale of the economic shocks we have come through, I am positively surprised how well we have come through this activity.

We cannot do anything about global oil prices.

We have got this. It is business as usual.”

The RBNZ has an annual inflation target of 1 to 3% but it’s currently running at 6.9%, with trimmed mean measures – “which exclude extreme price movements” – also rising from between 5.2 to 6.5%.

But don’t worry – despite being consistently wrong for over a year (remember when inflation was “largely temporary”?), Orr still wants people to trust that “we have got this”!

Orr also appeared to be completely dismissive of the role fiscal stimulus, not adequately offset by tighter monetary policy (real rates are still negative), played in pumping up prices. That’s despite the RBNZ’s own forecasts predicting a positive “output gap” – the difference between the actual output of an economy and its potential output – until 2025.

In fact, Orr wants it to remain that way:

“When we’re looking at monetary policy and saying ‘where’s the biggest impulses to change in pace coming from’, at present, it’s not the Government.

I would say strongly we are in for significant economic and financial challenges around which traditional fiscal support is necessary to enable society to function as normal.”

Quite extraordinary. Do watch the full testimony if you have the time (and patience).

Chewing the fat

Bits and bytes

🎉 Bubble, burst: “Sales of nonfungible tokens (NFTs) have declined 92% since their peak last year.”

⚽ “The shirt worn by Diego Maradona when he scored two of the most famous goals in soccer history was sold for 7.14 million pounds on Wednesday, marking a new auction record for an item of sports memorabilia.”

📝 Norway’s Prime Minister Jonas Gahr Støre said that if they applied, Sweden and Finland could have their NATO memberships approved in just two weeks.

👎 After five years at the helm, Hong Kong’s chief executive, Carrie Lam, “is on track to depart at the end of June with the lowest approval ratings of any leader since the handover from Britain”.

📈 Brazil’s central banked raised its cash rate by 100 basis points, the tenth consecutive monthly increase bringing the benchmark to 12.75% – its highest level in five years.

🔥 The Bank of England also raised its cash rate 25 basis points to 1%, forecasting that inflation will surpass 10% this year, the highest level since 1982, and that the UK will slide into recession.

🐊 Only in Florida: “Alligator Breaks Into Florida Family’s Garage, Starts Chugging Diet Cokes.”

🦠 A new pre-print (not peer reviewed) study from the US found that after controlling for several variables, the Omicron variant had “nearly identical… risks of hospitalisation and mortality” as its predecessors.

🏉 Due to COVID-19 and injury ruling out 21 players, the West Coast Eagles will have just 22 available AFL-listed players and no head coach when they take on Brisbane tomorrow night.

🗳️ A CNN poll found just 23% of Americans rated “economic conditions as even somewhat good, down from 37% in December and 54% last April”.

📉 Activity in China’s services sector “slumped to its weakest level in more than two years in April as Covid outbreaks and lockdowns continued to pummel consumer spending and threaten economic growth”.

📣 “Sources” have revealed that Elon Musk intends to serve as Twitter’s interim CEO, replacing Parag Agrawal who has only been in the role for a few months.

⚰️ A new World Health Organisation report estimates that 14.9 million people died because of COVID-19 (directly and indirectly), well above the official count of 5.4 million.