Business Insider’s weekly in-depth economics and markets podcast, Devils and Details, is coming LIVE to The Ivy in Sydney on November 27th, from 6.30pm. We’ve got a stellar line-up of some of Australia’s most forthright and insightful commentators and analysts, with panels to discuss investment, property, and the outlook for 2019. Tickets are $50 and include drinks and canapes on the night.
Ahead of the event, we’ve asked some of our panellists for some thoughts on a few key issues. They include:
- Laura Fitzsimmons, executive director, J.P. Morgan
- Con Michalakis, chief investment officer, Statewide Super
- Joanne Masters, senior economist, ANZ
- Pete Wargent, property expert, Allen Wargent
Over to Adam Smith, chief operating officer of Australian online foreign exchange and payments company OFX.
OFX is the event sponsor.
1. What are the key economic factors, at the global level or at home in Australia, you are watching most closely as we head towards 2019?
Global interest rates are on the rise, led by the US, and local Australian banks draw funding from US markets which will likely result in banks having to raise interest rates domestically.
Higher interest rates mean higher mortgage rates and in Australia many of the population are over-leveraged. Couple that with a 20-year low in wages growth and the result is likely uncertainty around consumer spending. It could potentially be a real dampener on consumption, as people must spend more money servicing their mortgage.
Any kind of interest hike would see the value of people’s most important asset (their home) decline which is negative for the economy as consumption of everyday goods and services will significantly reduce. This only compounds negative sentiment.
2. Can you share a favourite unusual economic indicator you like to watch closely? Explain why it interests you.
At OFX, we’re very interested on tracking ¨narratives¨ and how they might impact securities. You´ll be surprised on how much economic performance is influenced by the media and the stories they’re willing to put their attention to.
As an Australian company that operates in forex, but also one that has expanded overseas, I really see negative currency swings as a big factor for stunting small businesses – even large ones. We’re more global than ever so you cannot help but track where the rest of the world is going.
Which also leads on to US equity flows, Trump’s trade wars, Brexit.
I keep track of ETFs like WN Ultra Long Bond, which gives you a good view of the US Treasury market from a level and volume perspective. Same for some ETFs focused on the UK – these will sometimes be a good proxy of market expectations around Brexit for example.
3. What’s the most important piece of career advice you have to offer?
Be passionate and curious.
It sounds like a simple approach, but your career will be far more self-fulfilling when it’s centered around something you love, and that alone will drive you to develop your expertise and skills within your chosen field.
Being passionate and naturally curious helps fuel the search for new ideas, insights and new ways to improve. This can only lead to growth, for both yourself and those around you.
Hear more from Adam Smith at Business Insider Australia’s live event on November 27th >>