Economic and market news
This week new data showed that annual wages growth accelerated further in December, as public sector employees received the biggest quarterly pay rise in 15 years. Annual growth in the wage price index increased to 4.2 per cent in December. Notably, wages outpaced inflation (4.1 per cent over the period), meaning Australians experienced real wages growth for the first time in nearly three years (March 2021).
The December figure was the strongest pace of wages growth since March 2009, and compares to 4.1 per cent in the year to end-September.
Salaries grew by 0.9 per cent in the three months to December. This was slower than the 1.3 per cent gain in the September quarter, which was fuelled by a large increase in minimum award wages. However, it was strong in comparison to the subdued rates of wages growth in the pre-pandemic period.
Alongside this, analysis by the Australian Federal Treasury department, revealed under the Freedom of Information Act, was said by the Australian Financial Review newspaper to show that wages growth has now pushed the average fulltime salary in Australia above $100,000. Furthermore, this means that wages are now the biggest driver of consumer price inflation.
Pay rises apparently overtook import prices and supply shocks to form the lion’s share of headline inflation in the June quarter last year, a trend economists expect continued to the end of 2023 and into 2024.
In overseas news, the Chinese central bank has made another attempt to stabilise its deeply troubled property sector, with a record reduction in the key mortgage rate. The 25 basis-point cut to the five-year loan prime rate, from 4.2 per cent to 3.95 per cent, was the first since a 10 basis-point reduction in June last year.
The mortgage rate cut followed a 1 billion yuan ($212 million) injection of liquidity by the People’s Bank of China into the financial system at the weekend. These measures were taken as likely to be only the start of a more aggressive policy push to stimulate demand in the property market, where sales volumes and prices have been continuously for the past three years, and to boost consumer confidence and spending.
Australian indices
ASX 200: Was little changed over the week, up 0.05 per cent, to close at 7663.0 points on Tuesday.
All Ordinaries: Was up 0.14 per cent in the period, closing at 7922.2 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
|
94.10 |
3.81% |
+1 |
-8 |
+19 |
|
GTAUD5Y:GOV Australia Bond 5 Year Yield |
2.75 |
95.64 |
3.76% |
+1 |
-8 |
+6 |
|
GTAUD10Y:GOV Australia Bond 10 Year Yield |
3.00 |
91.01 |
4.13% |
+3 |
-11 |
+26 |
|
GTAUD15Y:GOV Australia Bond 15 Year Yield |
3.25 |
87.79 |
4.34% |
+3 |
-12 |
+21 |
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 (6 February 2024) |
+0.25 (7 November 2023) |
3.35 |
Currencies (source:RBA)
As at the close on 27 February, the AUD/USD was up slightly, 0.20 per cent, over the week, closing at 0.6544 on Tuesday. The AUD/RMB was up also up 0.20 per cent, in the period, closing at 4.7104 on Tuesday.
Venture Capital
Certa Therapeutics
Stoic investee Certa Therapeutics has announced that the US Federal Drugs Administration has granted Fast Track Designation for its investigational therapy, FT011, for treating systemic sclerosis.
Exonate
Stoic investee Exonate shared a podcast by CEO Dr Catherine Beech MB, ChB, OBE in which she explores the science that underpins its technology, the recent clinical trial success of EXN407, and explains how it is poised to revolutionize diabetic eye disease treatments.
An article in ACS Publications also explained how EXN407 works.
Property
Elanor Investors Group
Stoic investment partner Elanor Investors Group released its 2024 half year results this week. It sawanother period of strong revenue growth, and a significant contribution to earnings from the successful integration of Challenger’s real estate funds manager business (purchased in July 2023).
This week, new data showed that the national auction clearance rate fell by 2 percentage points to 73.5 per cent, the lowest level since the auction reporting season started this month. This was as the number of homes taken to auction jumped by 33 per cent to 2775 from a week ago, as sellers came back into the market post-Christmas and amid increasing confidence that interest rates have peaked.
