Asset Allocation: Progress Still

By Tony Brennan, Chief Investment Strategist

In Australia, like elsewhere, progress in reducing inflation has slowed this year, but it should continue gradually, returning inflation to the RBA’s target range over time and most likely without the need for a further rise in interest rates. Economic activity appears to be incrementally weakening domestically, which should reduce inflation pressures further, and there even appear to be signs of slower growth in the US, and this continuing should see an increased focus again on interest rate cuts in the months ahead. This should be supportive of fixed income, which we continue to advocate an above benchmark position in, and, broadly speaking, of equity markets, but where there could be more volatility after a benign six months, as corporate earnings also likely slow, and which we continue to advocate only a benchmark position in at the moment.

Contact your CG Adviser for a full copy of the report.