In this section, we look at the economic news affecting global markets this week.
- The RBA has left interest rates on hold, surprise surprise. The official cash rate remains at 1.50% for the 14th consecutive month, still above the global average. The RBA this time, seemed a little standoffish from offering any indication on where rates were heading. It is instead waiting for the housing market to cool and for a rebound in inflation to take place. It expects the current low rate of inflation to gradually increase as economic growth improves. Its forecasts were left unchanged. GDP to average 3% over the next few years. Markets aren’t pricing in another rate cut until February 2019 at 1.75%.
- Investor lending fell 6.2% in September compared with the previous month. Owner-occupier lending fell 2.1%. The only rise was from first-home buyers which was up 0.2%, hitting a 4.5 year high.
- US commercial property insurance rates are tipped to rise by up to 25% during 2018 for properties that suffered catastrophe losses this year caused by hurricanes Harvey, Irma and Maria.
- Those who filed for unemployment assistance increased more than expected. The number was up by 10,000 to a seasonally adjusted 239,000 from the previous week’s total of 229,000. Analysts expected jobless claims to increase by 2,000 to 231,000 last week.
- The IHS Markit’s final composite Purchasing Managers’ Index for the euro zone fell to 56 in October from September’s 56.7 but remains well above the 50 mark in growth mode.
- China’s trade surplus with the US has fallen. It fell from US$28.1bn to US$26.6bn.
- Inflation rose to 1.9% in October from a year earlier, beating market expectations for a 1.8% rise.
- Producer prices rose 6.9% on-year, unchanged from previous month’s increase. Analysts were tipping a 6.6% rise.
- Wages fell by 0.1% in September which is down for the fourth straight month.