Economic and market news
In Australian economics news, new data show that unemployment hit an 18-month high of 3.9 per cent in November. This increase from (a revised) 3.8 per cent in October was down to surge in people entering the work force, not all of whom were able to find work. There was an unexpectedly strong increase in employment of 61,000, and the number of unemployed people rose by 19,000. The employment-to-population ratio returned to a record high of 64.6 per cent and the participation rate reached a new high of 67.2 per cent.
Media began there round up of the year and forecasts for 2024. This included an explanation by a senior commentator about the impact that ongoing full employment is having on the broader economy, and why it is making the authorities’ job of taming inflation harder.
Alongside this, there was a consistent theme of calls for the Federal Government to take real steps to enhance productivity, this included further calls for tax reform.
More generally, there was discussion about the potential for the escalating tensions in Israel-Gaza to impact the global economy. Oil prices have surged, and container shipping is becoming more difficult as militants associated with Hamas step up their activities in the Red Sea.
In overseas news, new data show that consumer prices in the United States have decelerated to 3.1 per cent in November from 3.2 per cent. However, it was noted that core inflation (which excludes food and energy costs) rose 0.3 per cent in in the month. This is slightly faster than the increase the previous month, and leaves the annual rate unchanged at 4 per cent, twice the central bank’s target rate. This outturn was said to be prompting concerns that official interest rates will have to remain at or above current levels for longer than is currently expected.
Australian indices
ASX 200: Was up again this week, 3.51 per cent, to close at 7489.1 points on Tuesday.
All Ordinaries: Was up by a similarly amount (3.62 per cent) over the week, closing at 7715.9 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
|
93.40 |
3.85% |
+5 |
-29 |
+69 |
|
GTAUD5Y:GOV Australia Bond 5 Year Yield |
2.75 |
95.36 |
3.79% |
+6 |
-35 |
+50 |
|
GTAUD10Y:GOV Australia Bond 10 Year Yield |
3.00 |
91.02 |
4.11% |
+5 |
-36 |
+58 |
|
GTAUD15Y:GOV Australia Bond 15 Year Yield |
3.25 |
88.01 |
4.31% |
+5 |
-37 |
+47 |
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 (5 December 2023) |
+0.25 (7 November 2023) |
3.10 |
Currencies (source:RBA)
As at the close on 19 December, the AUD/USD was up 2.02 per cent over the week at 0.6726. The AUD/RMB had risen 1.53 per cent in the period, closing at 4.8028 on Tuesday.
Venture Capital
Cardihab
Stoic investee Cardihab announced a new partnership with Heart Support Australia, to help drive awareness of resources and services that can help people recover from and prevent heart events.
Morse Micro
Stoic investee Morse Micro announced a new partnership with Bear VAI Technology in United States. The collaboration will bring Bear VAI Technology’s 70-year track record of building strategic relationships with top electronic component manufacturers and providing technical support to customers throughout the Midwest.
Similarly, it has announced a partnership with Thorson Rocky Mountain, a leading manufacturer’s representative serving the Colorado, Utah, Montana, Wyoming, and Idaho markets. In Southern California it will tie up with NorcompSC. These are in addition to a new partnership with Synergy Associates Inc in New England announced last week..
Property
In residential property news, it was reported that Sydney’s auction clearance rate fell 1 percentage point to its lowest level (65.5 per cent) in 2023 last week. It was suggested that this was as a consequence of buyers being ‘spooked’ by the November interest rate rise.
Stoic investment partner Elanor Investors Group announced a joint venture with ICON Developments to develop a targeted $250mn-plus prime Australian logistics property portfolio. The joint venture has entered exclusive due diligence for its first acquisition, a brown field development opportunity in North Melbourne in Victoria.
Separately, the group opened its new shopping mall. The newCapital Food Market in Belconnen, in the Australian Capital Territory consists of a 4,300m² market hall, with basement parking for 200 vehicles. Elanor’s vision for the Capital Food Market targets net-zero carbon emissions. The development includes 540kW of rooftop solar electricity generation and an elevated roof structure allowing natural daytime illumination and non-air-conditioned ventilation. Industry-leading sustainable waste management practices have also been implemented whilst eliminating single-use plastics and providing recycled plastic shopping trolleys for customer use.
In other commercial property news, there have been significant deals in the regional shopping mall market, many of them with expected yields of over 8 per cent.
