Letter from the CIO - Lower Rates equals Higher Equities in 2H25

Download
Download

We think the tailwinds from offshore will remain relatively favorable (at least not deteriorating to any meaningful degree) while at the same time domestic drivers will gradually strengthen as the RBA eases policy settings. Historically a policy rate-cutting cycle outside of an economic recession is very bullish equity markets. If we are at the start of a cyclical upswing, even if moderate in amplitude versus history, then equities will remain a decent place to be.

We think the tailwinds from offshore will remain relatively favorable (at least not deteriorating to any meaningful degree) while at the same time domestic drivers will gradually strengthen as the RBA eases policy settings. Historically a policy rate-cutting cycle outside of an economic recession is very bullish equity markets. If we are at the start of a cyclical upswing, even if moderate in amplitude versus history, then equities will remain a decent place to be.

Download
Download