While the RBA (or its board members) are out this morning with a public endorsement of deficit spending, rather suggesting it has lost faith in its own housing recovery hopes, HSBC economist Paul Bloxham is also out with a new note reiterating his case for a bottom in interest rates on a housing-led recovery.
Ironically, Bloxo is closer to being right on his interest rate call this morning than at any previous time owing to the opposite economic reasoning.
Still, credit where it is due, Bloxo’s call that the China recovery will support Australia’s own rebound has proved right so far, though his conclusion that iron ore prices will remain at these levels for long enough to boost nominal growth to 7% is very bold.
Full report below.
130124 Downunder Digrest Commodites, China and Australia (1).pdf by Belinda Winkelman
