18 Oct 2024
Aussie equities higher on jobs report
Markets
- A mixed bag on the equity front this week with investors taking different leads in different parts of the world.
- The Australian equity market rose strongly, buoyed by a strong jobs report, whilst the US equity market was supported by a positive start to quarterly company earnings results.
- In local stock news, uranium stocks got a boost after Google signed a deal to purchase energy from a small modular nuclear reactor developer to power its energy-hungry AI data centres. Amazon announced a similar agreement.
- Rio Tinto reported third quarter production, with full-year iron ore cash costs to be towards the upper end of prior guidance.
- Oil prices fell with OPEC trimming its forecasts for oil demand growth for a third consecutive month and following a report Israel would refrain from targeting Iran’s oil production facilities.
- The Aussie dollar was largely unmoved for the week whilst the US dollar rose, with traders paring back US rate cut bets and pricing in a potential Trump election victory.
Economics
- Australia’s labour market grew more than expected in September, coming in well ahead of expectations for a sixth consecutive month. Employment grew by 64,100 versus expectations for a 25,200 lift. The participation rate also rose, remaining at record highs, whilst the unemployment rate was steady.
- US headline producer prices were steady from the prior month in September, and lower than forecasts, but the rise in core prices was marginally above expectations.
- US consumer inflation expectations for the year ahead were unchanged at 3% in September 2024.
- The European central bank lowered interest rates by 0.25% in October as expected, following cuts in June and September.
- European inflation was revised lower to 1.7% in September, compared to initial estimates of 1.8% and 2.2% in August, coming in below the ECB’s target. Services inflation slowed and the cost of energy fell at a faster pace than expected.
- UK annual inflation fell to 1.7% in September, the lowest since April 2021, compared to 2.2% in each of the previous two months and forecasts of 1.9%. Downward pressure came from transport, air fares and motor fuels, whilst food prices provided upward pressure.
- UK wages grew at the slowest pace in more than two years, with the unemployment rate ticking down to 4%.
- The annual inflation rate in Japan fell to 2.5% in September from 3% in the prior month, marking the lowest reading since April, with core inflation hitting a five-month low of 2.4%.
- Chinese inflation decreased 0% in September over the previous month. Annual inflation now stands at 0.4%, below forecasts of 0.6%. The 8th month of positive consumer inflation but the lowest print since June.
- China’s producer prices declined by 2.8% in September from the same time last year, a steeper than 1.8% fall in the previous month and market forecasts for a 2.5% drop. This marked the 24th consecutive month of producer deflation and the sharpest contraction since March.
- Exports from China grew by 2.4% in September on the same time last year, lower than forecasted 6% and down from a seventeen-month high of 8.7% in August. Weak global demand was the culprit. This marked the 5th consecutive month of growth, though at the slowest pace since April.
- The annual inflation rate in India rose to 5.49% in September from 3.65% in the previous month, well above market estimates of 5%, with a surge in food prices. It was the highest inflation rate since the start of the year and well above the central bank’s target.
- The annual inflation rate of New Zealand eased further to 2.2% in the September quarter, from 3.3% in the prior quarter. This marked the lowest reading since March 2021, and came in line with expectations.
Politics
- The US government is discussing capping sales of advanced artificial intelligence chips made by the likes of Nvidia and AMD to specific countries, limiting their AI capabilities on national security grounds. US officials seem to be focused on Persian Gulf countries.
- China’s finance minister promised the country would significantly increase government debt issuance to help stabilise the world’s second-biggest economy.
- China held military drills off Taiwan it said were intended as a warning to the island to halt “separatist acts”. Chinese officials said the country will take “a step further every time there’s provocation by the independence forces”.
- Israel’s air force struck Beirut for the first time in almost a week targeting what it described as an underground weapons stockpile. Lebanon’s PM said Washington had assured him attacks would ease.
If you would like to discuss any of the information or meet with us, please feel free to call or email us by clicking here
General Advice Warning - Any advice included in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation or needs.
