Economic and market news
New data show that the unemployment rate in Australia remained steady at 3.7 per cent in August. This was despite the fact that the number of people employed rose 65,000, more than double what was expected. The participation rate hit a record level of 67 per cent. The ongoing strength and tightness of the labour market continues to surprise commentators, in light of the slowdown in economic growth.
In overseas news, core inflation in the United States was reported to have accelerated in August, for the first time since February, to the fastest rate in a year (0.6 per cent). Commentators suggested this ‘keeps the door open’ to another official interest rate rise. The increase in inflationary pressure was due to the surge in fuel prices, as supply cuts by OPEC countries impact global oil prices.
In the UK, new data show that the economy shrank by more than expected (0.5 per cent) in July, after a gain of 0.5 per cent in June. The contraction was attributed to wet weather holding back spending.
Meanwhile in the Euro area, the European Central Bank raised its official rate to a record high of 4 per cent, and signalled that this is probably the peak. However, it indicated that inflation is likely to remain above target for longer than anticipated, with slower-than-previously-forecast economic growth, and that rates will therefore likely remain at this elevated level for some while.
In long awaited good news about the Chinese economy, new data on retail sales and industrial production data for August were stronger-than-expected. The numbers were said to be the first evidence that the Chinese Government’s modest stimulus measures could be working to stabilise the economy.
Australian indices
ASX 200: Fell slightly this week (0.14 per cent), to close at 7196.6 points on Tuesday.
All Ordinaries: Also fell (0.11 per cent), closing at 7395.0 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
|
92.47 |
3.90% |
-2 |
-1 |
+75 |
|
GTAUD5Y:GOV Australia Bond 5 Year Yield |
2.75 |
94.56 |
3.92% |
-3 |
-4 |
+46 |
|
GTAUD10Y:GOV Australia Bond 10 Year Yield |
3.00 |
90.40 |
4.16% |
-4 |
-7 |
+49 |
|
GTAUD15Y:GOV Australia Bond 15 Year Yield |
3.25 |
87.01 |
4.39% |
-5 |
-8 |
+53 |
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) |
|
4.10 |
No change (5 September 2023) |
+0.25 (6 June 2023) |
2.35 |
Currencies (source:RBA)
As at the close on 19 September, the AUD/USD was almost unchanged over this week, up 0.09 per cent, to 0.6431. The AUD/RMB also rose only slightly, up 0.20 per cent in the period, closing at 4.6928 on Tuesday.
Venture Capital
ENA Respiratory
Stoic investee ENA Respiratory was recently awarded a contract extension and additional US$3.8mn from the United States Department of Defense. This week it revealed that the additional money will fund a change it tack in its research. The anti-viral nasal spray which ENA has been developing contains a key molecule, INNA-051, which has been shown in Phase 2 trails to have significant efficacy at stimulating the immune system to reduce the viral load of flu in humans. The new direction maintains the key ingredient, but moves towards a dry powder formulation (still delivered in a nasal spray) which would be more stable and have a longer shelf life. This is important for the military setting, but would also have advantages in wider distribution.
Ferronova
Stoic investee Ferronova has announced that it has received ethics approval to conduct the a study to investigate the safety, feasibility, and potential clinical impact of using the FerroTrace magnetic nanoparticle formulation, magnetic resonance imaging (MRI), and the FerroMag magnetic detector for lymph node mapping in gastric and esophageal cancer patients. This will be undertaken initially at the Royal Adelaide and Queen Elizabeth Hospitals, before expanding to other sites.
Property
New data show that there was a more than 20 per cent surge in property listings across Australia in August. This is ahead of the usual increase in market activity in October and November, and some commentators have suggested it relates to the, now, three month pause in official interest rate increases.
