Economic and market news
Domestic and global markets remained in turmoil this week as tensions continued to escalate in the Middle East. Ongoing upward pressure on oil prices exacerbated the volatility in financial markets, which are jittery about the impact that the conflict could have on the outlook for global demand, and the campaign across the developed world to tame inflation.
New data this week showed that the unemployment rate in Australia fell in September, to 3.6 per cent, from 3.7 per cent in August. Commentators highlighted that the increase in employment of only 6,000 in the month was well below expectations (of 20,000), but it was noted that this was after a significant increase in employment in August. Taken together, the two months were in line with the average increase over the past year. The reduction in the unemployment rate was attributed to unemployed persons exiting the labour force, with the participation rate falling from 67 per cent to 66.7 per cent, still an historically high level.
Australian indices
ASX 200: Dropped this week, slipping back beneath 7000. It fell 2.82 per cent over the week, to close at 6856.9 points on Tuesday.
All Ordinaries: Also fell over the week (2.74 per cent), closing at 7045.6 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
|
92.22 |
4.21% |
-7 |
+16 |
+71 |
|
GTAUD5Y:GOV Australia Bond 5 Year Yield |
2.75 |
93.03 |
4.29% |
-8 |
+22 |
+49 |
|
GTAUD10Y:GOV Australia Bond 10 Year Yield |
3.00 |
86.57 |
4.68% |
-9 |
+35 |
+54 |
|
GTAUD15Y:GOV Australia Bond 15 Year Yield |
3.25 |
81.60 |
4.94% |
-10 |
+39 |
+48 |
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 (3 October 2023) |
+0.25 (6 June 2023) |
2.60 |
Currencies (source:RBA)
As at the close on 24 October, the AUD/USD was almost unchanged over the week, up to 0.6359 from 0.6355 (+0.06 per cent) at the close last Tuesday. The AUD/RMB fell slightly, down 0.06 per cent in the period, closing at 4.6443 on Tuesday.
Venture Capital
There was discussion this week about investment in the global biotech sector. Commentators noted that, per capita, Australia is the most productive biomedical research nation in the world. However, it was highlighted that, when it comes to commercialisation, the Australian investment ecosystem invests only 4 cents in biomedical companies for every dollar invested in the US. It was suggested thatthis underinvestment stifles the growth of the local biotech sector, resulting in lost value and missed opportunities. The piece mooted that global biotech is about to boom, but Australian investors’ caution is likely to see them miss out.
Certa Theraputics
Stoic investee Certa Theraputics was excited to announce yesterday that US Food and Drug Administration (FDA) has granted Orphan Drug Designation to FT011, its lead candidate for the treatment of scleroderma (a debilitating inflammation and fibrosis of the skin and other organs (commonly the lungs, kidneys, and heart)). Certa’s CEO and founder, Professor Darren Kelly, noted that the designation is an important milestone in the development of the drug.
The Designation will provide assistance in the drug development process, tax credits for clinical costs, exemptions from certain FDA fees, and seven years of post-approval marketing exclusivity.
Property
New data show that the national auction clearance rate held above 70 per cent again this week. The auction clearance rate was 70.8 per cent, which was said to have been ‘a sign the property market is shifting to the middle ground between buyers and sellers, as increased auction volumes temper vendor dominance’.
