18th October 2009

After a break in our coverage, Dontschuk and Associates resumes its commentary with a quick round tour of the key Macro settings for Australian strategy.

The key conclusion is Australia will continue to benefit in the near term from

• Global demand for commodities
• Domestic balance sheets generally being in good shape
• Government stimulus flowing through to domestic and consumer demand 

However there are risks and pressures which make us vulnerable

• A bubble forming from the nexus between RBA tightening to keep domestic demand in check and
  Australia being in flavour for hot money looking for a 'carry' trade
• This could choke off our export led recovery and increasing rates will hurt domestic demand potentially causing a boom/bust beyond policy setters control
• Unfortunately the political cycle won't allow for the proper unwinding of fiscal stimulus leaving us vulnerable to big moves in monetary policy

For details of the presentation see Australian Recovery?

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