9 Mar 2018
RBA on hold for 17th straight month
Markets
- Local and global share markets finished higher this week as investors looked through US tariff implications.
- In local stock news, Telstra and News Corp will merge Foxtel (jointly owned by the 2) with News Corp’s Fox Sports by the end of June. News Corp will own 65% of the new company with Telstra owning the rest.
- The International Energy Agency has said that it expects the US alone will cover 80% of the world’s oil demand growth over the next 3 years, with China remaining the main engine of growth for global oil demand.
Economics
- The Reserve Bank of Australia left cash rate unchanged at 1.5% for a 17th straight meeting, citing their comfortableness with both local and global economic conditions, but remaining in no rush to raise rates.
- The Australian economy grew at 0.4% in the December quarter for an annual increase of 2.4%, coming in below market expectations.
- Meanwhile, the RBA governor Philip Lowe tried to the talk the economy and inflation up saying that investors and workers should feel confident that both will rise in the coming years.
- Australia recorded a trade surplus of $1.1bn in January as exports rose 4% and imports fell 2%.
- The Chinese government has set an annual growth target for the world’s 2nd largest economy of around 6.5% for 2018. The Chinese economy grew 6.9% last year.
- The European Central Bank remains ready to increase its asset purchase program (QE) in terms of size and/or duration if the economic outlook became less favourable. However, the Bank did confirm that the current program (30bn euro a month of asset purchases) will run until the end of September 2018, or beyond if necessary.
Politics
- President Trump has stated that he would only lift planned tariffs on steel and aluminium imports if Mexico and Canada agree to sign a new agreement. He then flip-flopped on this, following pressure from Congress, providing an immediate exemption for Mexico and Canada while allowing other countries to negotiate exclusions (singling out Australia).
- Voters in Italy delivered a hung parliament, with none of Italy’s 3 main groups achieving a large enough majority to govern alone. Further complicating the result was the large swing to anti-EU parties, which means there is little prospect of a return to mainstream / moderate government.
- Reports have indicated that North Korea is now open to the possibility of talks with the US on denuclearisation.
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
