Economic and market news
The Reserve Bank of New Zealand accelerated its monetary policy tightening cycle this week, raising its official interest rate by 0.75 percentage points, the largest increase in its history. Alongside this, it forecast that New Zealand would go into a ‘shallow’ recession from the middle of 2023. This move is ahead of another expected 0.25 percentage point increase in official interest rates next week in Australia,
New data on retail sales in Australian during October showed a slowdown of -0.2 per cent in the month. However, that was ahead of what commentators and retailers are expecting to be a record set of Black Friday sales, with in the region of $6 billion predicted to be spent in the period.
There was speculation that the October outturn for the new monthly inflation indicator will show another jump in inflation when it is released on Wednesday. Key components expected to contribute to this are food prices impacted by recent floods, rents, and airfares. Inflation is forecast to peak in December.
The onset of the next wave of COVID-19 has elicited discussion about the approach that the newly re-appointed Chinese leader will take. Indications that there will be a reassertion of the COVID-zero policy, which had been seemingly been relaxed recently, has sparked riots in China. These developments have led commentators to consider the implications of the unrest, and also more supply chain and production disruption thanks to lockdowns, on the global economy and markets.
Australian indices
ASX 200: Rose 1 per cent, over the week, to 7253.3 points at the close on Tuesday.
All Ordinaries: Also rose, 0.89 per cent in the past week, closing at 7442.0 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
|
94.46 |
3.16% |
+4 |
-4 |
+252 |
|
GTAUD5Y:GOV Australia Bond 5 Year Yield |
2.75 |
97.28 |
3.34% |
+4 |
-9 |
+202 |
|
GTAUD10Y:GOV Australia Bond 10 Year Yield |
1.75 |
84.59 |
3.60% |
+9 |
-13 |
+186 |
|
GTAUD15Y:GOV Australia Bond 15 Year Yield |
3.25 |
91.55 |
3.93% |
+9 |
-9 |
+190 |
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) |
|
2.85 |
+0.25 (1 November 22) |
+0.25 (1 November 22) |
0.10 |
Currencies (source:RBA)
As at the close on 29 November, AUD/USD had risen 1.24 per cent on last week, to 0.6706. The AUD/RMB rose 1.38 per cent in the week to 4.8028.
Commodities
There was commentary and analysis of the potential opportunities for Australia in the global clean energy transition, because of the abundant deposits of metals, minerals and rare earths, including copper, lithium and nickel. These are used heavily in the production of clean energy technology such as electric vehicles, photovoltaic cells and wind turbines. They are also important in the production of high tech devices such as iPhones.
This sector was also reported to be an important sector for the Australian Government’s economic strategy.
Venture Capital
Cardihab
Stoic investee Cardihab has announced that it has been named in the HolonIQ annual Tech100 list of most promising startups from across digital health,biotech, medtech, and other innovation categories within healthtech.
Forcite
Stoic investee Forcite was nominated for the UNSW Founders’ People’s Choice Award for 2022. And HiConsumption ranked the Forcite MK1S as the best smart helment on the market.
Morse Micro
Stoic investee Morse Micro announced that its Series B funding round now totals $170 million. It said that the participation of major Australian super funds had added $30 million to the funding raise.
Property
Commentators considered the implications of the ongoing lockdowns and economic crisis in China on the Australian property market. It was mooted that a significant proportion of Chinese owners of Australian property may have to sell their holdings.
