The majority (69 per cent) of investors polled at the recent Citi Investment Conference have tipped New Zealand will move to negative cash rates in the first half of next year.
The virtual conference hosted close to 2,000 investors and fund managers from around the world.
Delegates voted on a range of topics in a sentiment survey, with key findings including the majority believing New Zealand is set to implement a negative cash rate while the Reserve Bank of Australia was likely to bottom at 10 bps as voted by 78 per cent of attendees.
Only 30 per cent of respondents thought Australia would travel into negative rate territory.
Meanwhile the vast majority (69 per cent) also thought the S&P would be 5 per cent higher by 30 September next year.
Looking towards the US, around 38 per cent of respondents reported they have their portfolios positioned for a Democratic sweep.
Around 32 per cent thought US-China relations would deteriorate following the US election with more protectionist policy put in place, though 42 per cent thought it would remain stable.
Two-fifths (41 per cent) thought travel would return to pre-COVID levels by 2023.
Citi Australia’s head of investor sales Mark Woodruff commented investor confidence is underpinned by the continued supply of fiscal stimulus and expectations of further monetary stimulus in both Australia and New Zealand.
While addressing the conference, RBA governor Philip Lowe signalled the central bank’s board had not yet decided on whether it would cut rates to a record low of 0.1 per cent.
“During his speech, the RBA governor clearly outlined his willingness to do more with monetary policy and we have seen a significant market reaction in kind,” Mr Lowe said.
“The question of record low rates and expansive fiscal policy permeated all discussions, and it’s interesting to see the poll results indicating increased confidence of a Democratic sweep, and in turn a majority of respondents looking for equity markets to be higher in a year despite the uncertainty of the recovery due to COVID-19.”
On climate change, more than half (52 per cent) of attendees said better political leadership of political certainty was voted the most likely factor to ensure Australia makes the most of the industrial transition towards a lower carbon economy.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
Economists agree that the Reserve Bank is likely to remain in inflation fighting mode until December. ...