Economic and market news
In market news this week, two of the four major Australian banks posted record profits in the face of sluggish growth in the economy. Both also noted that distressed debt remained at low levels despite the repeated increases in interest rates.
In economic news this week there was a focus on the Reserve Bank of Australia’s new forecasts. It was reported that it has 'nudged up' its expectations for inflation over the next two years. Price pressures are now expected to ease more gradually than previously thought. Inflation is now forecast to decline to around 3.5 per cent by the end of 2024 and to reach a little below the 3 per cent upper boundary of the target range by the end of 2025. This will likely mean higher interest rates for longer.
Alongside this, the Bank upgraded its economic growth forecasts. It now expects GDP to expand by 2 per cent to the end of 2024 and 2.4 per cent to the end of 2025, compared to its forecast three months ago of growth of 1.6 and 2.3 per cent respectively.
It was noted that the forecasts are based on the market-implied path of interests rates, which would allow for another increase in the official rate from the new level of 4.35 per cent.
Australian indices
ASX 200: Rose back above 7000 this week. It was up by 0.42 per cent, to close at 7006.7 points on Tuesday.
All Ordinaries: Also rose 0.42 per cent over the week, closing at 7207.1 points on Tuesday.
Government Bonds
Government Bond Yields (Source: Bloomberg)
|
NAME |
COUPON |
PRICE |
YIELD |
1 DAY |
1 MONTH |
1 YEAR |
|
GTAUD2Y:GOV Australia Bond 2 Year Yield |
0.25
|
92.19 |
4.34% |
0 |
+31 |
+117 |
|
GTAUD5Y:GOV Australia Bond 5 Year Yield |
2.75 |
92.84 |
4.34% |
0 |
+29 |
+92 |
|
GTAUD10Y:GOV Australia Bond 10 Year Yield |
3.00 |
86.81 |
4.66% |
-1 |
+20 |
+90 |
|
GTAUD15Y:GOV Australia Bond 15 Year Yield |
3.25 |
82.25 |
4.88% |
0 |
+17 |
+75 |
Reserve Bank of Australia (Source:RBA)
|
RBA CASH RATE TARGET (RBATCTR:IND) CURRENT (per cent) |
MOST RECENT DECISION (percentage points) |
MOST RECENT CHANGE (percentage points) |
1 YEAR PRIOR (per cent) |
|
4.35 |
+0.25 (7 November 2023) |
+0.25 (7 November 2023) |
2.85 |
Currencies (source:RBA)
As at the close on 14 November, the AUD/USD had fallen over the week, 1.04 per cent, to 0.6372. The AUD/RMB also fell, down 0.84 per cent in the period, closing at 4.6475 on Tuesday.
Venture Capital
Morse Micro
Stoic investee Morse Micro has been selected as a finalist for the 2023 Tech Trailblazers Awards in the Internet of Things category.
Whiterabbit.ai
Stoic investee Whiterabbit.ai announced a new collaboration with the American College of Radiology’s Data Science Institute, to make its AI-driven breast-density software available on the AI-LAB platform. WRDensity is the first Federal Drug Administration-cleared, commercial algorithm on the platform.
Property
Residential auction clearance rates were said to have 'held steady' despite the latest increase in interest rates, and the spring surge in listings. Nationally the clearance rate was 69 per cent, in line with the previous week. Sydney’s clearance rate was 70.4 per cent, compared to 71.9 per cent the previous week. In Melbourne, 67.7 per cent of auctions were successful, up from 60.8 per cent even though listings more than doubled in the past week, after the interruption of the Melbourne Cup Day long weekend.
