The RBA Board meets this week for the first time this year. During the period since the Board last met, there has been a significant impact on the world stock markets, the fall in crude oil prices and a consensus of a sub 7% growth in China. However in the absence of any major data from Australia, RBA Board is likely to leave the cash rate steady at 2%.
Bank of Japan followed the ECB and cut its cash rate to negative -0.1% to kick start the economy. BOJ stated that it wants to see core inflation rise to 2% and it will do "whatever it takes" to achieve that. This was a surprise move and following the announcement, the Nikkei rose and the Yen weakened.
Bank of Japan followed the ECB and cut its cash rate to negative -0.1% to kick start the economy. BOJ stated that it wants to see core inflation rise to 2% and it will do "whatever it takes" to achieve that. This was a surprise move and following the announcement, the Nikkei rose and the Yen weakened.
mike baird renews push to lift gst
NSW Premier Mike Baird has renewed his push to increase the rate of GST to 15% to fund gap in health and education costs. A Newspoll survey only found a third supporting such a move which the Premier says will be rebalanced in 2020 after extra funds are applied to wards health, education and cuts to company and personal taxes. Premier's call is not widely supported by other state Premiers, but no doubt tax reforms will form part of the Government's election plan when Australia votes later this year.
sydney petrol prices fall to 96 cents for e10 fuel
As we reported last week, we finally saw crude prices fall through the $1 mark and regular unleaded with 10% ethanol was selling at around 96 cents a litre last week. While brent crude prices have now reversed the trend, it is likely that Sydney motorists will continue to see petrol at around a dollar a litre at the low end of the cycle.
MARKET UPDATE FOR THE WEEK
| Australia Cash rate Australia 90 day bank bill Australia 10 y bond US 10y Govt bond AUD/USD AUD/EUR AUD/JPY AUD/CNY ASX 200 S&P 500 Dow Jones Shanghai Composite Brent Oil (USD per BBL) Gold Spot (USD per oz) | 29 JAN 2016 2.00 2.285 2.63 1.92 0.71 0.6496 85.21 4.669 5044.7 1940 16466 2737.6 36.14 1117.6 | 22 JAN 2016 2.00 2.27 2.73 2.05 0.7006 0.6466 82.61 4.6096 4966 1906 16093 2916 32.18 1097 |
market outlook
The RBA Board meets on Tuesday 2 February. Elsewhere, the China manufacturing data will be published tomorrow as well. During the week, the December dwelling approvals data, the NAB Q4 business survey and the December retail trade data will be of interest.
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