Et tu, Brute?

  • 06 Sep 2018
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Et tu, Brute?

It was no Shakespeare play, but it was just as brutal as the knives that came out for Malcolm Turnbull. In the end it was a bloodless coup and it is not clear what has changed, other than the fact a Labor victory seems even more likely. The only thing left is to see if Shorten can lose the unlosable election. If this comes to pass and Shorten retains his current policies, there are some negative connotations for Australian shares and property that investors will have to start to take into account.

Trump continues to spar with almost everyone and it looks as though the tariffs are going to come in for China, but at least the US and Mexico are trade buddies. Having tariffs in place is the position from which Trump likes to make deals, but if it drags on, it could slow the world economy and at the same time push up prices. There are also the US midterms coming up and there is a chance Trump will lose control of the house.

The world is not getting any simpler and we continue to remain vigilant with the main potential hotspots being:

  • Turbulence in Emerging Markets – this is likely as companies have borrowed in $US to access low interest rates and this is a trap that usually ends badly, but this rarely enough to derail the global economy; and
  • Australian Housing – prices are falling and supply is still coming on strong.

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