Founder Evidente. Top rated quantitative analyst, Evidente

Sam Ferraro

Founder Evidente. Top rated quantitative analyst

Evidente

Evidente is an independent financial education firm that delivers innovative financial advice to wholesale investors, including active long only funds, hedge funds, pension funds, and sovereign wealth funds, in Australia and globally.  Drawing on academic research in asset pricing, behavioural finance and portfolio construction, Evidente provides wholesale investors with commercial solutions to stock selection and asset allocation decisions across equities and other asset classes.

Macroeconomics

<ul><li>Interbank futures are currently implying a 25% chance of a rate cut at the next Board meeting on November 3<sup>rd&nbsp;</sup>. I discuss five reasons why the RBA ought to deliver more policy stimulus at that meeting: Australia remains stuck in a wage recession, animal spirits in the corporate sector show little sign of revival, macro-prudential measures are curbing rapid growth in mortgage lending to investors, a low September quarter CPI print should offer the RBA the positive narrative that it seeks to cut rates, and the absence of an explicit easing bias has not stopped the central bank from easing in the past.&nbsp;</li><li>The key risk to this view is the prospect of a strong September employment data print, slated for release on October 15th.&nbsp; As expectations of a November rate cut grow, sentiment should push the Australian dollar lower in the short-term.&nbsp; I would view any renewed depreciation as a buying opportunity, given that according to Evidente&rsquo;s currency model,&nbsp;undervaluation of the A$/US$ exchange rate remains at an extreme.</li></ul>

Interbank futures are currently implying a 25% chance of a rate cut at the next Board meeting on November 3rd&nbsp;. I discuss five reasons why the RBA ought to deliver more policy stimulus at that meeting: Australia remains stuck in a wage recession, animal spirits in the corporate sector show little sign of revival, macro-prudential measures are curbing rapid growth in mortgage lending to investors, a low September quarter CPI print should offer the RBA the positive narrative that it seeks to cut rates, and the absence of an explicit easing bias has not stopped the central bank from easing in the past.&nbsp;The key risk to this view is the prospect of a strong September employment data print, slated for release on October 15th.&nbsp; As expectations of a November rate cut grow, sentiment should push the Australian dollar lower in the short-term.&nbsp; I would view any renewed depreciation as a buying opportunity, given that according to Evidente&rsquo;s currency model,&nbsp;undervaluation of the A$/US$ exchange rate remains at an extreme.

VanEck Vectors Australian Banks ETF (MVB AU)

RBA Still In Denial