Welcome to the Mclowd Practitioner Update.

HSBC chief economist Paul Bloxhome said the latest cut and the rationale for the decision suggested the central bank had more serious concerns about the economy.

RBA will go lower ‘if needed’, AFR July 3rd


Interest rates on German Government Bonds are now negative out to a period of 13 years (and the total stock of negative-yielding bonds now exceeds US$12.5 trillion).

This means that investors – far from expecting a nominal yield on their investment – are prepared to pay for the privilege of lending the German Government money for more than a decade.

Investors don’t buy 13-year negative yielding bonds because the global economy is a rosy picture of health.

They buy those bonds as an insurance policy against the capital destruction that is an inevitable consequence of one thing:


And while they have been held at bay for some time in Australia, those
same deflationary forces:

  • Have finally reached our shores
  • Will be reflected in decreasing yields (and corresponding pressure on the SMSF value chain)

GST / Commercial Property

The recent GST upgrade was an important step in providing improved support for Practitioner users, particularly for Funds which hold commercial property (perhaps on behalf of a related SME client) or are otherwise registered for GST.

At $2.50 per month – and even before we begin delivering against our FY20 targets – the combination of the suspense allocations interface and improved GST logic represents an ultra-low cost solution for Funds with this (relatively simple) profile.

International Equities

While not part of our immediate deliverables, the Team have begun to analyse the steps involved in improving support for international equities.

This project will involve two main elements:

  • Access to data from the relevant exchanges
  • Support for automated currency conversion

Fortunately low-cost API consumption models are becoming the norm across the global asset management eco-system, and in the case of foreign exchange data we will be using a free tool called Open Exchange Rates.

Open Banking

In a similar vein, Mclowd has already begun the preparatory work associated with becoming an Accredited Data Recipient under the Federal Government’s Open Banking Regime.

Enabling the ingestion of transactional data across all Australian banks will obviously grant to the Community far greater leverage from:

  • The current accounting logic
  • All future investment in automation (allocation rules, etc)


The fact that Mclowd has / will have access to free foreign exchange / bank transactional data simply reflects the deflationary forces:

  • Which have underpinned the economics of the Community since inception
  • With which Mr Lowe and his peers are now grappling

While it is clear he will keep cutting interest rates (and potentially start printing money), what is less clear is whether he actually understands the ultimate Zero Marginal Cost destination.


Ashley Porter

Managing Director
Mclowd Pty Ltd