Episode #24| July 2026: More Hawks than Doves.

Yeah, as you say, there are a lot of things that really didn't move a lot, certainly on the surface.

But there are a lot of things that moved an awful lot under the surface, if you like.

So we look at the broader equity market here.

It was a very pedestrian return of just 0.6, including dividends.

So that's the accumulation index here, positive 0.6. Small caps did more poorly than that.

They were down about 2%.

In the US, it was quite mixed.

Some of their key markets were up.

So the Russell 2000, which is a small cap orientated index, that did really the best out of the major indices.

And we think that's got quite a bit to do with the fact that the US economy is proving quite resilient, in spite of all the fears, of course, related to the Middle East.

So the Russell was up 3.6, whereas the NASDAQ, for example, was down 2.8, which is a lot to do with a very, very significant rotation in the relative winners and losers within the NASDAQ.

Looking across interest rate markets, on the surface, things moved a little bit.

Yields here in Australia moved by about 10 basis points, so a pretty quiet month for Aussie bonds and a similar sort of change if we look in the US.

But underneath that apparent... lack of movement was actually a huge change in inflation expectations and that is pretty important.

One of the things that did actually move and has now moved to the most extended valuation we've seen in decades and decades is the yen.

So I just want to come back.

And talk a little bit about that, because that's ticking away, if you like, in the background.

In

terms of it being the weakest it's been? Yeah, the weakest it's been in

20 or 30 years.

And after you allow for inflation and do that kind of relative effective exchange rate calculation, it's, according to some analysts, the weakest it's been since the 1960s.

So that is pretty significant.