Economic and market news
New inflation data to be release this week are expected to indicate that prices decelerated further in December. Commentators have suggested that the monthly inflation figures will show the rate of inflation has moderated to a two-year low of about 4.3 per cent.
If this is the case, it was mooted that the Reserve Bank of Australia will hold official interest rates steady at its first policy meeting of the year, next Tuesday. However, while market economists expect goods inflation to continue to ease from here, it is thought that policymakers will continue to be concerned about the persistence in services inflation in labour-intensive sectors.
Alongside this, new retail sales figures show that spending fell by 2.7 per cent in December. This outturn more than ‘corrected’ the stronger-than-expected increase in sales in November, which included activity related to Black Friday and Cyber Monday sales. Taken together, the outturns for the past two months support the case that there has been a change in the seasonal pattern of retail purchases ahead of the festive season. They also highlight that economic activity is continuing to soften under the weight of higher interest rates.
In overseas economic news, new data show that inflation in the United States has also continued to moderate. The Federal Reserve’s preferred gauge of underlying inflation cooled to an almost three-year low of 2.9 per cent in the year to end December.
Meanwhile, new data on economic growth show that the US economy expanded at a faster-than-expected 2.5 per cent in the December quarter. This was said to be thanks to strong consumer spending. It was noted that this is contrary to dire predictions of a recession as a consequence of the central bank’s aggressive raising of official interest rates.
Australian indices
ASX 200: Was up 1.14 per cent over the week, to close at 7600.2 points on Tuesday.
All Ordinaries: Was up 1.20 per cent in the period, closing at 7835.0 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
|
93.83 |
3.82% |
-3 |
+12 |
+70 |
|
GTAUD5Y:GOV Australia Bond 5 Year Yield |
2.75 |
95.62 |
3.75% |
-5 |
+12 |
+46 |
|
GTAUD10Y:GOV Australia Bond 10 Year Yield |
3.00 |
90.89 |
4.14% |
-7 |
+19 |
+61 |
|
GTAUD15Y:GOV Australia Bond 15 Year Yield |
3.25 |
87.57 |
4.36% |
-8 |
+20 |
+51 |
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 30 January, the AUD/USD was almost unchanged, up 0.11 per cent over the week at 0.6609. The AUD/RMB was similarly stable, up 0.24 per cent, in the period, closing at 4.7441 on Tuesday.
Venture Capital
Morse Micro
Achieving another significant milestone for wireless connectivity, Stoic investee Morse Micro has successfully demonstrated a live video call over sub-GHz Wi-Fi HaLow signals covering 3km. Previous range data for Wi-Fi HaLow has hovered around the 1km benchmark, making this an important achievement.
Property
In property news this week, it was revealed that Sydney house prices have more than doubled in the past decade, outperforming all other capital cities. Furthermore, commentators have suggested that prices could repeat this pattern, and double again in the next 10 years, if the 10 per cent year-on-year growth rate seen in 2023 was to continue.
