Economic and market news
In economic and market news this week, a 14 per cent drop in oil prices since November is being taken as a precursor to a significant drop in inflation. Economists are predicting that inflation in Australia will fall to the lowest levels since 2021 off the back of this drop, somewhat relieving cost of living pressures.
Separately, economists are predicting the Reserve Bank of Australia will start to cut its policy rate in September as the economy weakens, and with inflation back close to the top of its 2-3 per cent target band. These predications mean that the Australian central bank will likely lag its major economy counterparts, in particular the US Federal Reserve and European Central Bank, in its policy easing cycle, as it did in raising rates. There are also some commentators that believe that the Bank has not yet reached its peak in the cycle, and may raise its policy rate one more time in February.
This week has also seen a further rallying in stock markets in Australia, with a number of top companies, including major banks and miners, all seeing record highs in their share prices on Tuesday.
Australian indices
ASX 200: Was up again over the holiday season, 0.46 per cent, to close at 7523.2 points on Wednesday.
All Ordinaries: Was up by a similarly amount (0.54 per cent), closing at 7757.3 points on Wednesday.
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
|
93.60 |
3.81% |
+7 |
-34 |
+39 |
|
GTAUD5Y:GOV Australia Bond 5 Year Yield |
2.75 |
95.65 |
3.73% |
+6 |
-41 |
+4 |
|
GTAUD10Y:GOV Australia Bond 10 Year Yield |
3.00 |
91.54 |
4.04% |
+5 |
-45 |
+4 |
|
GTAUD15Y:GOV Australia Bond 15 Year Yield |
3.25 |
88.64 |
4.25% |
+5 |
-45 |
-3 |
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 3 January, the AUD/USD was up 0.55 per cent over the holiday period at 0.6763. The AUD/RMB had risen 0.64 per cent in the period, closing at 4.8335 on Wednesday.
Venture Capital
BioScout
In its Christmas and New Year round up Stoic investee BioScout highlighted the 15 new customers that are now using its technology in Australia, New Zealand and Northern America. There are now over 70 Spore Scouts now on the ground, delivering high-resolution insights into airborne disease levels. It also noted that it took out the top prize at the Australian Good Design Awards.
Exonate
Stoic investee Exonate also reflected on its incredible achievements in 2023, with 11 new FDA approvals, as well as the successful completion of a phase Ib/IIa trial of its lead candidate, EXN407, a first-of-its-kind topical treatment for diabetic macularedema.
Forcite
Stoic investee Forcite rounded out the year by highlighting some of its new retail partners across Australia.
Morse Micro
Stoic investee Morse Micro won Read Magazine's Best WiFi IOT Product of 2023 in the WiFi Now Awards. This was on top of a whole host of other significant achievements in 2023.
Property
New data on the property market show that prices rose by 8.1 per cent nationally in 2023. This is compares with a 5 per cent fall in values in 2022.
Within the national figure, Sydney home values jumped by 11.1 per cent over the year, Brisbane by 13.1 per cent, Perth by 15.2 per cent, and Adelaide by 8.8 per cent.
The growth in the market was despite five interest rate hikes by the Reserve Bank in 2023, on top of its eight increases in 2022. These policy increases (designed to slow inflation, but which in the interim add to cost of living pressures) were on top of other affordability challenges in the market such as rising advertised stock levels and low consumer sentiment.
The figures suggested that there was some further slowdown in the market in December which saw a national 0.4 per cent increase in prices.
