Graham Bradley says the economy is on the “cliff edge of recession” and Tony Shepherd says the “resources sector won’t save us this time”.AUD +0.4% to 67.97 US centsIn New York late: BHP +2.1% Rio +2.5% Atlassian -0.3%Spot gold +0.5% to $US1953.59/oz at 1.52pm in New York10-year yield: US 3.79% Australia 3.97% Germany 2.45%The Leuthold Group said earnings momentum continues to flash a pending recession. “With the second month of Q1-23 reporting complete, our Up/Down ratio reads 1.07.
“Monthly Roy Morgan data and the weekly ABS payrolls both suggest some upside risk to employment, and while lead indicators such as vacancies and employment intentions within sentiment surveys are weakening, that’s happening from a high base. Some leads such as internet vacancies are even rising again. RBC expects the labour market to weaken materially in H2, but while the “best” is likely behind us, it’s still too early for much weakness to show up in the LF survey.
“Forecasts are likely to continue to feed divisions, with higher near-term core but medium-term inflation at target. We are bearish front-end, believe curves may not steepen by as much as expected, like Euribor-€str wider, swap spreads tighter. We see balanced EUR risks, as the market is already pricing hikes for this meeting and next.”: “We continue to think that markets are overestimating how ‘sticky’ ECB policy rates will be.